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Going back to school? 3 ways to reduce the cost

If you’re considering going back to school, you’re likely thinking about how you’re going to pay for it. Your total price tag may include not just tuition but also fees, course materials and room and board.

The good news is many people qualify for some kind of financial help. Here are three funding options you may want to look into.

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Typically grants are awarded based on financial need, whereas many scholarships are merit-based and may require standards, for example maintaining a certain GPA. These are not loans and do not have to be repaid.

Taken together, federal and state governments are the largest providers of grants and scholarships. The most common grant is the Federal Pell Grant, which provides need-based assistance to undergraduates and some graduate students. The grant, which has a maximum award of 4,860 dollars for the 2016 to 2017 school year, depends on your status as a full-time or part-time student, as well as financial need. Many schools also offer grants and scholarships that may be need-based, merit-based or a combination. Private organizations, such as the National Association for the Advancement of Colored People (NAACP) and the Boy Scouts of America, may also offer money to students.

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Your employer may reimburse your tuition, fees, materials or other similar expenses when they are used for career-related courses, since additional education may make you a more valuable employee. Federal tax law allows your employer to reimburse up to 5,250 dollars of these expenses each year, free of federal income tax, though you generally have to pay tax on amounts above 5,250 dollars. You may qualify for additional education-related tax breaks, as well.

Keep in mind that different employers have different policies regarding tuition assistance. They may require you to work for the company for a specified period in order to qualify, or tie your eligibility to your GPA. Others may have a graduated requirement: For example, if you complete a course with an A grade you earn full reimbursement, while a B receives partial reimbursement.

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Many adult students work full-time and take one or two classes a semester. If you want to take a larger class load, it may make sense to scale back to part-time work. (Bear in mind, however, that your employer may require that you work a certain number of hours, say, 30 a week, to retain retirement and health benefits.) Also, many government financial aid programs require you to attend school at least half-time. If you drop below, you may lose financial aid or have to begin paying off student loans.

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The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America and/or its partners assume no liability for any loss or damage resulting from one's reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment management.

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