En español | Let's try a thought experiment: You are over 50 and thinking about additional schooling — maybe to burnish your credentials, maybe to pivot careers and pursue a second act, or maybe because a pandemic-related layoff has given you little choice.
Do you think you are eligible for student aid?
Student aid is so associated with young kids coming straight out of high school that you might write it off as a possibility. But that's a mistake — because you are absolutely eligible.
"One piece of advice is universal: You should not assume that you are ineligible, or think that there is nothing out there for you,” says Kalman Chany, author of The Princeton Review's Paying For College and president of Campus Consultants. “That's just not true."
As a result, you should start where every other college student does: Filling out the FAFSA. The Free Application for Federal Student Aid (fafsa.gov) is the master key that helps unlock loans and grants at the federal, state and institutional levels.
Here's why that's so important: Those 50 and over in America are already struggling with a huge student debt load. They are carrying $349 billion as of the fourth quarter of 2020, or roughly 20 percent of the national total.
At an age when you should be starting to throttle back and enjoy life a little more, extra debt can be a heavy burden to bear. So any strategies to minimize those debt loads become even more critical.
As you consider how much you can take on, here's a handy way to think about it: “If total student loan debt is less than annual income, they can afford to repay their student loans in 10 years or less,” says Mark Kantrowitz, student loan expert and author of How To Appeal for More College Financial Aid. “If they plan on retiring in less than 10 years, they should borrow proportionately less."
How to get started
Once you fill out the FAFSA, you will receive a package of loans and grants. One key difference compared to younger students: Anyone over the age of 24 is considered “independent,” which means there is no parental informational required.
You can fill out the FAFSA even in your current school year. So if you are already enrolled and taking courses in the 2020-2021 school year, you can still file all the way through June 30, 2021. Similarly, if you are looking at the fall and the 2021-2022 school year, the deadline is June 30, 2022. The form then has to be filled out every year.
That being said, early application is always the better strategy, because some pots of student money will run out. For example, Alaska, Illinois, Kentucky, Missouri, Nevada, North Carolina, North Dakota, Oklahoma, Oregon, South Carolina, Texas, Vermont and Washington all award state aid on first-come, first-served basis until the money is depleted.
If you're unhappy with the aid numbers you receive, you can always appeal. Since income information is based on prior years, an appeal could succeed if there have been recent changes to your financial status — a layoff because of the pandemic, for instance.
You may have read about some changes to FAFSA formulas, such as the replacement of the Expected Family Contribution. But those shouldn't alter your near-term thinking, as any changes won't be coming online until 2023-2024.
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For mature students, there are a few things to keep in mind. Federal Pell Grants are only for the first bachelor's degree — so if you already have a sheepskin and are pursuing a second bachelor's, you would not be eligible for Pell Grants specifically. For that reason, “they might want to consider going to graduate school instead of getting a second undergraduate degree,” Kantrowitz says.
On the subject of loans, limits are slightly different for older students: Independent undergrads have limits of $9,500 for the first year, and $57,500 overall; graduate students have $20,500 limits for the first year, and $138,500 overall.
In addition to federal, state and institutional aid, you can also search for scholarships at Fastweb and other sites, some of which are specifically designed for mature students. Enter your information and be matched with opportunities among its database of 1.5 million scholarships and $3.4 billion in funding.
And don't overlook tax credits, either. The American Opportunity Tax Credit (AOTC) is good for four years of higher education, with a maximum annual credit of $2,500. Unlike deductions, which reduce your taxable income (and therefore your taxes), tax credits reduce your tax bill dollar for dollar. There is also the Lifetime Learning Tax Credit, which is worth up to $2,000 per tax return, with an unlimited number of years.
Finally, check and see if your state offers financial aid — almost every state does. You can find information on your state programs through the National Association of Student Financial Aid Administrators.
Less is more
The main borrowing advice for mature students is to tread carefully. The notion of taking on new debt, at a stage in life when you don't have as much runway to pay it all back, should give you pause. Of course federal student debt is discharged upon death or permanent disability, but that's not a happy prospect, either.
One suggestion from Chany: Look at more affordable options like community colleges, which should lessen your financial anxiety. Some institutions have special programs for adult learners and reduced tuition fees. In fact some even translate life experience into actual credits, which can shorten your timeline for getting a degree.
Or if it's just the learning you're interested in, and not necessarily a full-fledged degree, many community colleges allow older students to audit classes for free on a space-available basis.
"At that age, if you are getting ready to retire or are already retired, incurring too much new student debt doesn't make a whole lot of sense,” says Chany. “The key is to try and get funded as much as you can."