What To Keep In Mind If You’re Paying Tuition For More Than One Person

College is a big expense if you have just one kid in school, let alone two or more. From comparing tuition costs and financial aid packages between schools to researching available tax deductions, here are some tips to help make sure you get the best bang for your buck when paying college tuition.

Compare costs and financial aid packages

Different schools can cost very different amounts. For example, a state school will likely cost less than a private school, and in-state tuition will probably be lower than out-of-state tuition. Then, there’s financial aid. Filling out the Free Application for Federal Student Aid (FAFSA®) can give you access to grants, work-study opportunities, loans, and more.

Financial aid packages will differ by school. Once you add a second child in school (for example, maybe one will be a first-year and the other a junior), the package for the student who has been in school may increase to accommodate your financial burden.

Depending on your package, a private school might end up costing less than a state school. So, it’s important to consider not just the sticker price but also the impact of financial aid.

Look into scholarships

Outside scholarships—scholarships given by an organization other than the college the student’s been admitted to—can help reduce the overall cost of education. Look into scholarships that your student(s) may be eligible for. Scholarships are available for community service, the arts, academic achievement, sports, and more.

Create a spending plan

Once you know what you’ll be paying each year, it’s time to finalize your budget. What are the costs for each student? How much will be covered by grants, loans, and scholarships? Will you use savings to pay for all or part of what’s left over? Are there other sources of funding you can use, such as income from a rental property or the cash value of a universal life insurance or whole life insurance policy?

Don’t forget, college comes with additional costs that can add up quickly, such as books, trips home, supplies, and social activities. So, remember to include these expenses in your budget.

Research tax deductions

There are tax credits and deductions available to those paying educational expenses. For example, the American opportunity tax credit is available for people paying tuition for the first four years of higher education. You cannot claim the credit if your modified adjusted gross income is over $90,000 or $160,000 for joint filers.

Research what tax breaks are available on a federal and state level and consult a tax professional if needed. Make sure you know how they scale or don’t scale if you’re paying tuition for more than one student. And remember, you’re likely still able to take advantage of these tax breaks even if you’re taking out loans to pay for school.

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