Financing Your Education

Besides aid from the U.S. Department of Education (ED), the federal government offers several other financial aid programs. These programs include: 

• Education awards for community service with AmeriCorps
• Educational and training vouchers for current and former foster care youth and/or
• Scholarships and loan repayment programs, including the Department of Health and Human Services' Indian Health Service, the National Institutes of Health, and the National Health Service Corps.
• Tax benefits for education 
• Aid for military families

Federal Direct PLUS loans are federal loans that parents of dependent undergraduate students can use to help pay for education expenses not covered by other financial aid. Once your student has filled out a FAFSA, parents can apply for a Federal Direct PLUS loan at studentaid.gov.

• Parent PLUS loans are federal loans that parents of dependent undergraduate students can take out to help pay for education expenses not covered by other financial aid. Once Salem State has received your student's FAFSA, parents can apply for a Federal Direct Parent PLUS loan at studentaid.gov.
• For Federal Direct PLUS Loan purposes, a parent is considered your biological or adoptive mother or father, but not a legal guardian.
• Federal PLUS loans are also available to graduate or professional students. You can find more information on Federal Graduate PLUS Loans at studentaid.gov

Enroll in an interest-free monthly payment plan through TouchNet, (plan enrollment is a $40 non-refundable fee). Enrollment for Fall plans is mid-July, Spring plan is mid-December, and Summer plans are mid-May. Please refer to the TouchNet announcement section for specific dates when plans are available. Review the "How to set-up a Payment Plan" guide for more information. 

Private student loans can help you cover the cost of attendance that isn't covered by other aid you've received. These private loans are available through banks, credit unions, online lenders, and other financial institutions and must be paid back. Salem State does not endorse any particular lender; visit elmselect.com to compare student loan options.

There are a significant number of external private scholarships that are not connected to Salem State University. Checking with your high school is a great place to start. Employers and community organizations often have scholarships available to students. You can also search the internet for scholarships. Scholarships.com and Fastweb.com are great places to start.

Tax benefits can be used to receive back some of the money you spend on tuition or loan interest or to maximize your college savings. Many families plan to use a savings plan, like a 529 Education Plan, or other tax benefits to assist their students in school. It is important to note that this is not a financial aid award but money paid to the family through the annual tax cycle - not when the bill is due. 

Tax Credits for Higher Education 

Two tax credits help offset the costs (tuition, fees, books, supplies, equipment) of college or career school by reducing the amount of your income tax:

• The American Opportunity Credit can be used each year for the first four years of school as the student works toward a degree. The credit allows up to $2,500 per year for money paid toward tuition, enrollment fees, course-related books, supplies, and equipment needed for attendance but not paid to the college directly. It does not cover housing and meals. Students must be enrolled at least half-time to be eligible. 
  The Lifetime Learning Credit allows the student, the student's spouse, or the student's family to claim up to $2,500 per year per household. The credit can be used for any college or career school tuition and fees, as well as for books, supplies, and equipment that were required for the course and had to be purchased from the school. The same student cannot claim the credit if they have claimed a different tax credit within the past year of claiming the Lifetime Learning Credit.

Coverdell Education Savings Account

A Coverdell Education Savings Account allows up to $2,00 a year to be put aside for a student's education expenses (elementary, secondary, college, or career school).

IRA Withdrawals for College Costs

You may withdraw from an IRA to pay for higher education for yourself, your spouse, your child, or your grandchild. Federal income tax will be owed on the amount withdrawn, but you will not be subject to the early withdrawal penalty. 

Qualified Tuition Programs (QTPs, also known as 529 plans) 

A QTP/529 plan is established by a state or school so that you can either prepay or save up to pay education-related expenses. Once a student is in college, a family can withdraw money from their account to pay for education expenses. The money withdrawn will not be taxed. To learn more about state 529 plans, please visit www.collegesavings.org. 

Student Loan Interest Deduction

A tax deduction can be taken for the interest paid on student loans that were taken out for yourself, your spouse, or your dependent. The benefit applies to all loans (not just federal student loans) used to pay for higher education expenses. The maximum deduction is $2,500 a year. 

For more information, read IRS Publication 970, Tax Benefits for Education, to see which federal income tax benefits you may apply, or visit https://studentaid.gov/resources/tax-benefits.