Financial Aid: Alternatives for parents and students

Programs for Parents - Explore these alternatives if you need additional help to meet college costs.

• A federal volunteer program in which participants serve for 10 to 12 months. At the completion of service, full-time participants receive a $5,350 education award (pro-rated for part-time service). The voucher may be used to pay off qualified student loans or pay for future education expenses at qualified schools.
• For more information, call 1-800-942-2677, or visit www.americorps.gov.

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• Graduate and professional degree students may borrow through the PLUS loan program, up to their cost of attendance minus other aid. Students must have first applied for maximum loan eligibility under the Stafford loan program and must have acceptable credit history.
• Interest rate is currently fixed at 7.9%.
• To apply, students complete the FAFSA and a Federal Direct PLUS loan application. Check with the college for loan application procedures. For more information, visit www.studentaid.ed.gov.

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• PLUS is a federal loan program where parents and/or stepparents may borrow up to the cost of attendance, less other financial aid, each year for each undergraduate dependent child enrolled at least half-time. Eligibility is not based on need but parents must have acceptable credit history or an eligible co-signer. PLUS loans can be used to meet the calculated family contribution.
• The interest rate is fixed at 7.9%. Borrowers may have up to 10 years to repay. Interest may be tax deductable.
• Check with the college for application procedures. For more information, visit www.studentaid.ed.gov.

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Home equity loans or line of credit

• These methods of financing an education offered by many banks and lending institutions enable parents to access the equity in their home. When used for educational purposes, there may be significant tax advantages. Contact the college financial aid office or your tax advisor for additional information.

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• The Federal government offers tax credits and deductions to families and students with qualifying education expenses, including tuition and related fees, books and other required course materials paid for higher education. Interest paid on qualifying student loans may also be deducted to reduce the amount of your income subject to tax by up to $2,500.
• For more information, contact your tax advisor.

Interest-free monthly payment plans

• Interest-free, insured, monthly installment plans are available at many colleges for payment of tuition, fees, room and board and other expenses. Generally, 10- or 12-month payment options are available at no interest.
• Check with the college's financial aid office or catalogue for additional information.

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New York State college tuiton tax credit/deduction

New York State taxpayers may take either a:

1. Tax credit or an itemized tax deduction for college tuition expenses at an in-state or out-of-state institution for their dependent's, spouse's or their own undergraduate study; or,
2. Itemized deduction for qualified college tuition expenses up to a maximum of $10,000 for each eligible student.

For more information consult your tax advisor or go to: www.hesc.org

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New York State's 529 College Savings Program

• Start a college savings program with a minimum $25 deposit. You need not be a New York State resident, although NYS taxpayers may deduct their contributions to the fund, up to $5,000 per year (up to $10,000 for married couples filing jointly), from NYS net taxable income. Qualified withdrawals are exempt from state and federal income taxes. Savings may be used to meet college costs at any eligible college or university in the U.S. and some foreign institutions.
• For information, call 1-877-NYSAVES, or visit www.nysaves.org.

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