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Headed Back to School?

There's plenty of financial help out there if you know where to look

spinner image Chatzky: Back to School

It's one of the questions I get asked most often: Do you save for your children to attend college or for your retirement? The answer is the latter — because there's plenty of financial aid for college but no financial aidfor retirement.

But what if it's you who wants to go to school? The number of graduate and postgraduate students ages 50 to 64 has been climbing steadily, from 625,000 in 2007 to as many as 750,000 in 2011 — a 20 percent increase, according to the National Center for Education Statistics. Adults "assume because they're not a 17-year-old or they're working, they won't qualify for aid," says Mark Kantrowitz, senior vice president and publisher of

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Here's how to make the most of your options.

Fill out the Free Application for Federal Student Aid (FAFSA)

Submit this just as you did when your children were in school. It's best to try to exhaust your opportunities for federal aid before turning to the more expensive private market. The most common types of federal aid — Stafford and Plus loans — are available to you. Pell and Supplemental Education Opportunity grants are restricted to students without bachelor's degrees; and if you're going to school as an undergrad, you're not eligible for a Parent Plus loan.

Take it seriously

For most types of federal financial aid, you need to be enrolled at least half time in a degree or academic program. "You can't just go back and enroll in continuing education or take one class at a time," says Karen McCarthy, senior policy analyst with the National Association of Student Financial Aid Administrators.

Seek a tax break

You may be eligible for an annual $2,500 American Opportunity Tax Credit. Another break, the Lifetime Learning Tax Credit, is worth up to $2,000 per year, but you can't take it in the same year you take the American Opportunity credit. Taxpayers under a certain income level can deduct student-loan interest. Bonus: You don't have to itemize.

Open a 529 account

If one or more 529 savings accounts have money that your children didn't need, change the beneficiary to yourself. If you know in advance that you're heading back to school, open a 529 for yourself. That may get you a state tax deduction as well as the chance to earn some tax-free growth.

Get a scholarship

Some scholarships are specifically aimed at older students. Try StudentScholarshipSearch and Fastweb to find them. You'll be prompted to enter a birth date to find the ones that are age appropriate.

— With additional reporting by Arielle O'Shea

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