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How to pay for college when you have bills, kids and a mortgage

Krystle Lynch was a stay-at-home mom to three sons, ages 5 to 13, when she decided to go back to school for a master's degree in counseling in 2017.           

Mentally, the Orlando, Florida, mom felt up for the task, but financially it was a different story. An advanced degree would cost about $30,000, and Lynch, 37, would have to take out student loans to achieve her goal.           

After some thought, Lynch came up with a plan.  She’d get a job as a public school teacher while juggling a full-time course load.  Though she was a full-time student, “going back to work allowed me to start paying the loans back right away,” she says. 

Like Lynch, many Americans pursue higher education not after high school, but in later years when they have to juggle obligations such as children or a mortgage.  Between 2005 and 2015, the enrollment of people 25 and over in degree-granting institutions increased by 13 percent, according to the National Center for Education Statistics. Between 2015 and 2026, NCES projects that number to increase another 8 percent.

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Potential benefits of going back to school include increased earning potential and improved quality of life, but the financial risks can be steep. Here’s how to make sure a degree later in life is a step forward rather than a step back:          

Consider the cost of education

Ask yourself if the additional education will be paid off by greater earnings over the course of your career, says Michael Gerstman, a chartered financial consultant and CEO of Gerstman Financial Group in Dallas. Also consider the effect on your cash flow. Will you have a reduced income? Do you have a spouse who can pick up the slack? If you leave your job to go back to school full time, also consider the costs of lost benefits such as health insurance.          

Look for free money

Take advantage of tax credits for education, says Marcy Keckler, vice president of financial advice strategy at Minneapolis-based Ameriprise Financial. For example, the Lifetime Learning Credit is worth as much as $2,000 per tax return and the American Opportunity Tax Credit is worth as much as $2,500 per year.  There are also grants and scholarships for people going back to school later in life. Check with professional organizations in your field of study, as well as your state’s department of education. Collegescholarships.org provides a listing of scholarships and grants for students of all ages.          

Your employer may also offer support

Rebecca Carpenter, 28, of Philadelphia, received tuition reimbursement through her employer when she decided that a bachelor’s degree would help her land a promotion. A single mother of an 8-year-old son, Carpenter chose Peirce College in Philadelphia because it offered flexibility, such as online and weekend classes while she pursued the degree part time. “Being a working mom, I’m already juggling a lot,” she says.          

Be cautious about risking retirement 

“Don't short-change your long-term retirement future by spending your retirement savings on education,” says Keckler. If you take an early distribution prior to the age of 59 1/2, not only might you pay a tax penalty, but your money would no longer be accruing interest. Borrowing from your 401(k) might make sense in some cases, Gerstman says, as long as you’re prepared to pay the money back.          

Minimize your debt

Before taking out student loans, try to pay down other debts first. Natasha Campbell, 36, went back to school part time to get her MBA in 2008, four years after getting married, purchasing her first home and having a daughter. To prepare financially, Campbell and her husband reviewed their budget to eliminate as much consumer debt as possible. They also cut expenses such as gym memberships and other monthly subscriptions. “Self-awareness and recognition of our financial truth helped us move closer in the direction of our goals,” Campbell says.  If you have to take out student loans, consider federal student loans first because they typically have lower interest rates and more flexible repayment terms than loans by private lenders.          

Make sure the timing is right

Michael Davis, 62, of Springfield, Missouri, spent 10 years in the Marine Corps and then got married and had a baby. “I tried going to school at that time, but while raising a family, it just got to be too much,” he says. Years later, after his children were grown, he decided at the age of 54 to fulfill his dream. “I  worked during the day and then took afternoon and evening classes,” he says.”  Davis graduated from Missouri State University in 2016 with a Bachelor of Science in psychology, and this year received his master's in Administrative Studies.          

Taking more time to get your degree may be a wise strategy for some since it may be easier to pay as you go, Gerstman says.  “It may take you a little longer to get there, but you have not set yourself back financially to do so."             

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