Plenty of older adults attend university each year, with roughly 34% of all college students having been 25 or older in 2021. However, due to the ever-rising costs of pursuing a higher education, some older adults can't afford to do so. This can be especially detrimental for lower-income workers who can't stay current in their chosen fields without additional education. Fortunately, older adults who need to return to school have access to financial aid, tax breaks, and other resources that can make college more affordable.

Is Going Back to School Worth the Cost?

The value of a college education has become a matter of vigorous debate as college costs and student loan debt hav🐼e soa▨red to new heights. Yet, studies continue to show that there are few better investments.

Education Equals More Income

A 2024 study posted in the American Educational Research Journal estimates that, based on American Community Survey data from 2009 to 2021, the internal rate of return (IRR) for a bachelor's degree was around 9.88% and 9.06% for men and women, respectively. Meanwhile, the average return of stocks in the S&P 500 was 6%–7% (after being adjusted for inflation) in 2022.

In dollar terms, a 2024 report from the National Center for Education Statistics found that the median annual earnings of workers with bachelor’s degrees was $66,600 in 2022. Workers with just a high school diploma, meanwhile, earned $41,800 annually.

Costs and Time Matter

For many students, money is the major obstacle to getting a degree or other further education. According to a 2023 survey conducted by the Lumina Foundation, 55% of respondents age 25 to 59 identified costs as one of the key reasons why they couldn't return to school. Time was also an important factor, with 22% citing how long it would take to get a degree.

“Going back to school as an adult can be a challenge and very different from when you were in high school,” says , founder and president of Estate Planning & Preservation in Williamston, Michigan. “To determine if it’s the right decision, 🍬you need to consider both time and money.”

How to Pay for School

Older students have most of the same options as younger ones when it comes to paying for college. If you can afford to pay for it out of your savings, great. But for many people, getting a higher education means borrowing money to pay for it. While taking on debt may not be ideal, especially later in life, federal and 澳洲幸运5官方开奖结果体彩网:private student loans can often provide the funding you need.

To be eligible for federal student loans and other assistance, you need to complete the 澳洲幸运5官方开奖结果体彩网:Free Application for Federal S♔tudent Aid (FAFSA). “Filling out the FAFSA form will be different because you’re using your income, not your parents',” says Joseph. You're also reporting your own assets. There’s no age limit to apply for federal aid, and your 澳洲幸运5官方开奖结果体彩网:credit score won't&nbs♔p;affect your aဣbility to qualify for loans.

Private Student Loans

Private student loans are different from their fede𝄹ral couꦓnterparts in that private lenders will consider your income and credit history as part of the approval process. The higher your credit score, the more likely you are to be approved and qualify for the best interest rates.

Bear in mind that private loans lack many of the benefits and protections associated with federal loans. These include low fixed interest rates, a choice of repayment plans, and the possibility of loan forgiveness.

Scholarships and Grants

While many awards are geared toward first-time students, there are some scholarships and grants that cater to returning students. The advantage of scho🍬larships and grants is that, unlike student loans, they typically don’t need to be repaid.

However, some may come with strings attached. The Nurse Corps Scholarship program, for example, offers funding to students of all ages but requires a commitment to work at a health care facility with a critical shortage of nurses after graduation.

Employer Programs

Another potential source of money to pay for college may be your employer. Many companies offer 澳洲幸运5官方开奖结果体彩网:tuition reimbursement, scholarships, or repayment assistance ꧃for student loans, so it🐬's worth inquiring about.

“Many adult education programs at both the undergrad and graduate level are often geared toward workers who get some support from their employer,” says , an Ameriprise financial advisor in Conshohocken, Pennsylvania. Currently, employers can provide up to $5,250 in educational assistance annually that you 澳洲幸运5官方开奖结果体彩网:won't have to count as income on your tax return.

If your employer offers to help with college costs, that could w🐻ork to your advantage in more ways than one. “Returning to school could potentially add to job stabili🌌ty because once employers are invested in you, they may also have an incentive to keep you around now that you’re more qualified and have an expanded skill set,” Pearson says.

Tax Breaks for Education

Depending on your income, the expenses you incur, and other factors, you may also be eligible for a 澳洲幸运5官方开奖结果体彩网:tax credit or 澳洲幸运5官方开奖结果体彩网:deduction for a port𒐪ion of your costs. They won't pay for your current college expenses, but they can help defray your costs later.

Tax Credits

The 澳洲𒈔幸运5官方开奖结果体彩网:American Opportunity Taxꦉ Credit (AOTC) offers a maximum annual credit of $2,500 for the first four years of higher education. Meanwhile, the 澳洲幸运5官方开奖结果体彩网:Lifetime Learning Credit (LLC) offers an annual credit of up to $2,000 for undergraduate, graduate, and professional degree courses, with no limit on the number of years you can claim it.

Tax Deduction

The interest that you pay on a student loan may qualify for a tax deduction. Note that if you're eligible, you can take a 澳洲幸运5官方开奖结果体彩网:student loan interest deduction as an adjust𒐪ment to income, even if you don't itemize deductions on your tax return.

Maintain Your Long-Term Saving

As you plan for how you’ll pay for college, don’t neglect the other pieces of your financial life. That includes shoring up your emergency fund and continuing to build to ꦓyour꧑ retirement savings.

“When considering whether you’re going🃏 to go back to school, it’s important to make sure you have at least six months of living expenses saved,” Joseph says. This can help you cover expenses if going back to school means temporarily reducing your hours at work or if you need extra cash for costs that aren’t covered by loans, scholarships, or employer assistance.

If you continue to work while going back to school, resist the temptation to put your 401(k) or 澳洲幸运5官方开奖结果体彩网:individual reඣtirement account (IRA) contributions on pause. At a minimum, try to contribute enough to your workplace retirement plan to qualify for your employer’s full 澳洲幸运5官方开奖结果体彩网:matching contribution, if there is one.

Take advantage of other savings opportunities as well. You can contribute to a 澳洲幸运5官方开奖结果体彩网:529 college savings plan before you go back to scওhool and while you’re enrolled. These plans allow for tax-free withdrawals when you use them to pay for qualified education expenses.

If you don’t exhaust your 529 savings, you can pass the account on to your spouse, children, or other close relatives. You can also 澳洲幸运5官方开奖结果体彩网:use up to $10,000 of it to pay back student loan debt.

The Bottom Line

Returning to school is often worth the cost, but sometimes it's hard to find the money to pay for it. Funds may be limited for older students who are on a fixed income, responsible for a mortgage, or raising a family.

However, there are resources available to make a higher education more affordable♐, including scholarships, grants, and employer programs. Be sure to do your research to determine which of these will best suit your needs.