OKLAHOMA CITY - College is a common path for American students, but not many families can afford the skyrocketing cost of higher education.
According to the College Board report, tuition for public four-year colleges has increased an average of 3.5 percent each year over the past decade.
However, the Oklahoma Society of Certified Public Accountants says there are a few ways that you can lessen the burden.
- Research and compare colleges - Four year colleges are less expensive for in-state students, so you may consider staying close to home. Also, community colleges are usually cheaper and provide transferable college credit for the first two years of school.
- Use Section 529 plans - Section 529 plans allow tax-free earnings on the investments at federal and state levels, as long as the investment is used for qualified college educational expenses. Many states, including Oklahoma, allow a tax deduction for its own state income tax on amounts contributed.
- Set up a Coverdell Savings Account - This account can be established for a beneficiary by people below certain income limits. The money invested can be tax free as long as it is used for qualified educational expenses.
- Apply for federal financial aid - The federal government provides need-based financial aid, like grants, loans and work study programs for middle to low-income parents. A Pell Grant does not need to be repaid and is given to those who meet major need-based requirements. A Free Application for Federal Student Aid can be completed to determine eligibility for federal financial aid.
- Apply for scholarships - Scholarships are tax free and do not need to be repaid as long as the student meets the scholarship requirements.
- Check tax credits and deductions - For those who have not received sufficient financial aid, tax credits and deductions are available.
- Involve the student - Students can save money earned from summer jobs and they can stay home and commute to a local college so they don't have room and board costs. They can also work part-time to meet financial obligations.
- Weigh your costs against benefits - College can be a great place to find meaning in life and meet different people, but technology classes and the military are other options after high school.