Financial Aid for Lifelong Learning. ERIC Digest
by Kerka, Sandra
"Nontraditional" students are the fastest growing segment of the postsecondary
population: 40.9% of college students are over 25 (DiFiore 2001) and nearly
12% are over 40 (O'Brien and Merisotis 1996). Large numbers of adults are
engaging in non-degree lifelong learning, including certificate programs,
work-related training, and professional development. How do adults pay
for further education? Are they eligible for financial aid? In the past,
the bulk of financial aid went to traditional-age, usually full-time, students
in degree programs. Today the sheer numbers of nontraditional students,
including distance learners, are changing the financial aid picture (College
Board 2000). This Digest identifies types of financial aid available to
adults and lists resources you can use to help finance your lifelong learning
FEDERAL GRANTS AND LOANS
Criteria for most federal aid programs include financial need, high
school diploma or a General Education Development Certificate, regular
student working toward a degree or certificate in an eligible program,
U.S. citizen or eligible non-citizen, and satisfactory academic progress
(Sources: Indiana 1998; ROAD MAP 1999; STUDENT GUIDE 2000-2001).
Pell Grants: for undergraduate students who have not earned a degree;
can be for part-time study; awards range up to $3,000 per year depending
Federal Supplemental Educational Opportunity Grant: for undergraduates
with exceptional financial need; up to $4,000 per year depending on the
availability of funds at each school.
Federal Ford Direct Student Loan Program or Stafford Federal Family
Education Loan (FFEL) Program: for regular undergraduate or graduate students
enrolled in an eligible program at least half time; subsidized loan based
on financial need or unsubsidized loan not awarded on the basis of need;
not made to students enrolled in programs that are less than one-third
of an academic year.
Direct Consolidation Loans from the U.S. Department of Education and
FFEL Consolidation Loans from participating lenders such as banks, credit
unions, and savings and loans: allow borrowers to combine several types
of federal student loans with various repayment schedules into one loan.
Perkins Loans: low-interest loans for undergraduates (up to $4,000 per
year) and graduate students (up to $6,000 per year) with exceptional financial
A bank line of credit or home equity loan may be a tax-deductible but
risky alternative (Pittman 1997). Some banks and most credit unions will
allow you to take out a loan against existing savings accounts, bonds,
CDs, IRAs, money-market accounts, etc. (DiFiore 2001). Some lenders are
offering loan programs for working adults for shorter (non-degree) programs;
one example is The Education Resources Institute Continuing Education Loan
EMPLOYER ASSISTANCE AND TAX CREDITS
Employers provide assistance to many working adults for further education
and training. Check with your human resource department about tuition reimbursement
and other assistance. Restrictions often include work-relatedness of courses,
amount of reimbursement dependent on grade received, or graduate-level
courses only. Many companies are providing scholarships, distance training,
or partnerships with universities that subsidize tuition costs (BACK TO
SCHOOL 1999). The Exclusion for Employee Education Benefits (Section 127,
IRS Code) allows workers to exclude from taxable income up to $5,250 a
year in undergraduate tuition assistance provided by their employers. It
has been extended through 2001, and Congress is considering expanding it
to graduate study. Section 132 allows exclusion for study at any level
with no dollar limit, but it must be directly related to keeping the current
job. See TAX BENEFITS FOR WORK-RELATED EDUCATION, www.irs. ustreas.gov/prod/forms_pubs/
pubs/p508toc.htm. Other federal tax incentives www.ed.gov/inits/HOPE:
Lifetime Learning Tax Credit provides a 20% tax credit for the first
$5,000 of tuition and fees paid each year through 2002 and for the first
Hope Scholarship Tax Credit provides a 100% tax credit for the first
$1,000 of tuition and fees and a 50% credit on the second $1,000 for students
in their first 2 years of postsecondary education in at least a half-time
degree or certificate program.
Penalty-free IRA Withdrawals are limited to net postsecondary expenses
for tuition, fees, books, equipment, and room and board.
Deduction for Student Loan Interest paid in the first 60 months on any
loan used for college expenses.
SCHOLARSHIPS, ASSISTANTSHIPS, INTERNSHIPS, WORK-STUDY
Many scholarship programs do not restrict by age; some programs are
starting to create scholarships specifically for nontraditional students.
Information sources include the institution, libraries, employers, community
organizations, and professional associations. DiFiore (2001) recommends
using only free scholarship search services on the Web. The Federal Work-Study
Program provides jobs for undergraduate and graduate students with financial
need, allowing them to earn money to help pay education expenses. Assistantships,
internships, and cooperative education provide valuable work experiences
while you earn some income.
State Aid. Some states offer special programs specifically for adults.
To locate your state's higher education agency and link to their website,
If you belong to a union, HELP WITH COLLEGE COSTS www.aflcio.org/scholarships/index.htm
allows visitors to search for scholarships sponsored by national and international
Veterans' Educational Benefit Programs. Veterans of the Armed Forces,
members of the Selective Reserve, and National Guard members may have financial
assistance available to them to help meet educational and living expenses.
See icpac.indiana.edu/infoseries/is-55.html and students.gov Military funding
Congress lifted restrictions on financial aid for correspondence courses,
and the U.S. Department of Education is sponsoring demonstration programs
trying innovative ways of providing distance learning and financial aid,
but some regulations of the Higher Education Act still hinder aid for distance
education (Report to Congress on the Distance Education Demonstration Programs
2001 www.ed.gov/offices/OPE/PPI/DistEd.html). In the meantime, investigate
the financial aid office at the school you want to attend, your employer,
and federal programs. Although most federal grant and loan programs are
directed to the resident student, under certain conditions, Pell Grants
may be available to a person studying at a distance (Distance Education:
Paying the Bills 2001).
* Create a financial plan that accounts for tuition, books, child care,
transportation, housing, and other expenses. Pay off consumer debt.
* Apply early and pay attention to deadlines. The application process
is separate from college admission.
* Fill out the Free Application for Federal Student Aid www. fafsa.ed.gov/index.htm.
Completed 1040 forms make it easier, but estimates are allowed.
* Don't assume you make too much money to receive financial aid.
* Don't deplete emergency or retirement savings.
* Ask your institution about tuition payment plans.
* Reduce costs by gaining credit for prior learning through exams or
portfolios, or by transferring credits.
(DiFiore 2001; Indiana 1998; Pittman 1997)
GUIDES FOR ADULTS
AN ADULT'S GUIDE TO CONTINUING EDUCATION: FINDING THE MONEY. KCBS Channel
2000, 2001. www.Channel2000.com/education/conted/pay.html How do I apply
for financial aid? How do I calculate my need? Am I getting a good deal?
Where do I look for scholarships?
BACK 2 COLLEGE FINANCIAL AID. WD Communications, 2001. www.back2college.com/library/finad.htm
Tools, tips, work-sheets; scholarship and funding resources; graduate and
professional education; women, minorities, veterans, health professions,
disabilities, distance learning, loan resources, tax credits, international
BACK TO SCHOOL: A GUIDE FOR ADULTS RETURNING TO COLLEGE. College Planning
Network, 1999. www.collegeplan.org/bcksch/bkschool.htm
CHRONICLE FINANCIAL AID GUIDE 2000-2001: SCHOLARSHIPS AND LOANS FOR
HIGH SCHOOL STUDENTS, COLLEGE UNDERGRADUATES, GRADUATES, AND ADULT LEARNERS.
Moravia, NY: Chronicle Guidance Publications, 2000.
College Board. PAYING FOR COLLEGE: A FINANCIAL AID GUIDE FOR ADULTS
RETURNING TO SCHOOL. New York: College Board, 2000. www.collegeboard.org/finaid/html/CUPayforCollBro.pdf
COLLEGE IS POSSIBLE. Coalition of America's Colleges and Universities,
DiFiore, L. "Strategies for the Non-Traditional Student." FreSch! Information
Services, 2001. www.freschinfo.com/strategy-nontrad.phtml
eStudentLoan: Adult Students. Student Advantage Network, 2000. www.estudentloan.com/adult.asp
Financial Aid Advisor. America's Learning Exchange. www.alx.org/finadvintro.asp
Online financial aid eligibility questionnaire.
Finney, D. F. FINANCING YOUR COLLEGE DEGREE: A GUIDE FOR ADULT STUDENTS.
New York: College Entrance Examination Board, 1997.
Indiana Career and Postsecondary Advancement Center. RETURNING ADULT
STUDENTS. 2001. icpac.indiana.edu/finaid4. html Includes College Credit
for Past Education and Life Experience; The ICPAC Financial Aid Guide for
Adult Students; Finding Money for Your Education; Veteran's Educational
Benefit Programs; Financial Aid Page for Returning Students; Scholarship
Search Engines; Resources to Help You Estimate College Costs
PETERSON'S SCHOLARSHIPS AND LOANS FOR ADULT STUDENTS: THE ONLY GUIDE
TO COLLEGE FINANCING FOR STUDENTS 25 AND OVER. Lawrenceville, NJ: Peterson's
Thomson Learning, 2000.
Phillips, V. NEVER TOO LATE TO LEARN: THE ADULT STUDENT'S GUIDE TO COLLEGE.
New York: Princeton Review Publishing, 2000.
Plumb, S. R. FINANCIAL AID AND SCHOLARSHIP INFORMATION FOR ADULT STUDENTS.
ROAD MAP FOR THE NONTRADITIONAL STUDENT. Student Loan Funding Resources,
Inc., 1999. www.studentloanfunding.com/
Siebert, A.; Gilpin, B.; and Karr, M. ADULT STUDENT'S GUIDE TO SURVIVAL
AND SUCCESS. 4TH ED. Portland, OR: Practical Psychology Press, 2000. Supplement/update
at www.adultstudent.com/ includes Financial Aid Resources.
ETA ADULT TRAINING PROGRAMS. Employment and Training Administration,
U.S. Department of Labor. www.doleta.gov/programs/adtrain.asp
FEDERAL STUDENT AID INFORMATION CENTER: 800/4-FED-AID (800/433-3243)
FREE APPLICATION FOR FEDERAL STUDENT AID (FAFSA). www.fafsa.ed.gov/index.htm
THE STUDENT GUIDE 2001-2002. FINANCIAL AID FROM THE U.S. DEPARTMENT
OF EDUCATION. www.ed.gov/prog_info/SFA/StudentGuide/2001-2/index.html
STUDENT GATEWAY TO THE U.S. GOVERNMENT http://students.gov. Information
about federal student aid programs; tax credits; scholarships, grants,
and loans; state financial aid; work-study; military funding; budgeting;
DISTANCE EDUCATION: PAYING THE BILLS. NewsNet 5, 2001. www.newsnet5.com/education/distance_ed/pay.html
Hirst, K. GUIDE TO FINANCIAL AID FOR DISTANCE LEARNING. 2001. distancelearn.miningco.com/education/distancelearn/msubfinancialaid.
Phillips, V., and Yager, C. THE BEST DISTANCE LEARNING GRADUATE SCHOOLS:
EARNING YOUR DEGREE WITHOUT LEAVING HOME. New York: Princeton Review Publishing,
Bodine, J. "Aid Strategies for Grad Students: College Generosity on
the Rise." U.S. NEWS ONLINE, n.d. www.usnews.com/usnews/edu/dollars/dsgradaid.htm
FINANCIAL AID INFORMATION. Educational Directories Unlimited, Inc.,
Indiana Career and Postsecondary Advancement Center. FINANCIAL AID FOR
GRADUATE STUDENTS. Bloomington: ICPAC, 1998. icpac.indiana.edu/infoseries/is-97.html
Pittman, V. SURVIVING GRADUATE SCHOOL PART TIME. Thousand Oaks, CA:
CREATING OPTIONS: A RESOURCE GUIDE ON FINANCIAL AID FOR STUDENTS WITH
DISABILITIES. Washington, DC: HEATH Resource Center, American Council on
Education, 2001. www.acenet.edu/bookstore/pdf/heath-fin-aid 2001.pdf
DISABILITY ONLINE. Employment and Training Administration, U.S. Department
of Labor. www. wdsc.org/disability/
Ehrhart, J. K., and Lepof, A. FINANCIAL AID: A RESOURCE FOR WOMEN, 6TH
ED. Washington, DC: Association of American Colleges and Universities,
1998. (ED 430 441)
GRANTS FOR INDIVIDUALS: DISABLED, GAY/LESBIAN/BI/TRANS, MINORITIES,
NONTRADITIONAL, VETERANS, WOMEN. Michigan State University Libraries, 2001.
Reference Service Press guides: Financial Aid for African Americans;
Asian Americans; Hispanic Americans; Native Americans; the Disabled and
Their Families; Veterans, Military Personnel, and Their Dependents; Persons
with Visual Impairments. www.rspfunding.com/products/rspbooks/booklist.html
Schlachter, G. A. DIRECTORY OF FINANCIAL AID FOR WOMEN, 2001-2003. El
Dorado Hills, CA: Reference Service Press, 2001.