Families typically pay for college using many resources – income, savings, financial aid, tax breaks and borrowing.
If possible, students should work during the summer and save some of their earnings to help with college expenses. Saving just $1,000 from summer work can help pay for books and other living expenses.
Families often save for their children’s education using Section 529 college savings plans or traditional and Roth IRAs (Individual Retirement Account). Learn more about NextGen®, Maine’s Section 529 Plan.
Many families pay for a portion of college with financial aid. Financial aid includes scholarships, grants, loans and work-study.
Education Tax Breaks
The state of Maine and the federal government offer education tax benefits. Tax credits and deductions can help taxpayers with their expenses for higher education.
Reduce College Costs
Students may be able to reduce overall costs by starting college with some earned credits by taking Advanced Placement classes and community college courses. Sticking to a budget and buying used textbooks can also help stretch limited college funds.
Many families also borrow to pay for college. Since federal student loans have many benefits including flexible repayment options, they typically should be considered first. Some families also choose to borrow against the equity in their home or to take out private education loans.
FAME developed TheLoanforME.com as Maine’s student loan resource. This website has tools and information to help Maine students and families become more informed about borrowing for higher education, as well as a list of local private student loan options.
Apply For Scholarships
Be sure to research all sources of financial aid. Visit FAME’s scholarship search, or other sites such as FastWEB or The College Board. It is also important to research civic organizations, parents’ employers, the military, as well as high school guidance offices. Avoid scholarship scams. FREE scholarship search services provide excellent information.