Hot answers tagged

94

Some folks have touched on this, but I wanted to make sure I emphasize this. Getting a college degree does not require going into massive debt. In fact it doesn't require debt at all. Here are some options (this is US-focused): Get your core classes out of the way at a community college. Community colleges are a significantly cheaper way to earn college ...


85

You really have only three options (leaving out somehow legally forcing them to pay, about which I know nothing). I'm also assuming you're in the US. Somehow get enough in scholarships and grants to pay for your tuition and living expenses. Take out loans, which as you say may put you deeply in debt. Put off college for a while, and work until you have ...


54

It seems everyone has left one conspicuous option unspoken: Don't go to college. Let me be clear. I am not saying you should not go to college, but it is important to remember that not going to college is a viable option. There are many many well-paying jobs out there that do not require a college degree. The important thing to remember when preparing for ...


47

According to the OSAP website you will not be charged interest until 6 months after you graduate for the Ontario portion of your loans (Canada portion accrues interest immediately after graduation). The loans are interest and payment free while enrolled full-time. That means for the next year you could earn interest on your savings and have extra cushion at ...


31

Both your aversion to debt and your aversion to living paycheck-to-paycheck are admirable. Many people live in both of those states. Fortunately, if I am reading your question correctly, you can avoid both. You currently have $18k in your savings, and your tuition for the upcoming year is only $13k. This means that if you pay cash for your tuition, you will ...


30

Divorce records are public. Go to the county Clerk's office and read through all the documents (Divorce Decree, Property Settlement, etc). It'll be depressing, but that'll show how much your father is sending to your mother. Note that both sides might be telling the truth. Depending on where you live, housing expenses can be shockingly high, and teens -- ...


22

If you have decided to do the degree, and are simply deciding whether to accept employer funding for it or not, take the funding. I see no difference between "my employer doesn't pay my tuition" and "my employer paid my tuition but I had to pay it back because I moved on". Therefore there is no downside to letting them pay the tuition. If you want to move on ...


21

My wife and I have six children who are in college or have graduated. So far, with almost no financial help from us, they have earned 4 Bachelors degrees, a Masters degree, and an Associates degree (with a Bachelors degree and a PhD in progress). On their own, they covered the cost of housing, living expenses, tuition, books, and fees. The only thing we ...


20

This may or may not answer the question, but is far too long for a comment. Many people's parents do not pay their children's tuition in full in the US. I'm writing this as if your parents will not be contributing a significant amount. If you can convince them to do so, bully for you. This doesn't have to wreck your life (unless you foolishly let it). Your ...


11

I had found myself in a somewhat similar situation from my education. From what I realised, is that it really depends on your debt/risk tolerance. Also to note that the rate isn't actually 3.5% but 70% federal loans of prime + 2.5% and 30% provincial loans of prime + 1.5% (Which is currently 3.95% + 2.2% = 6.15% interest overall!). If you are not debt ...


10

Don't let your parents drag you into their arguments. This is BAD co-parenting. Yes there is probably alimony paid. It is much harder for 2 people to afford living independently than together (2 mortgages or rents, day care instead of at home care, etc etc). Ignore the bickering between them and don't ask for explanations. Look at your future as if they ...


9

Why limit yourself to $28K per year? If you pay the tuition directly to the institution, it does not count against your annual or lifetime gift-giving totals. You could pay the entire tuition each year with no tax consequences. The only thing you can't do if you want to go this route is give the money to your children; that's what causes the gift tax to ...


8

You need professional help. If this is seen by the federal government as a federally backed student loan this can have repercussions beyond applying for credit and having a good credit score. Your ability to use federal programs can be limited (as you already found out) as can the ability to work for the government. From a money standpoint you need to ...


8

The other answers are great but I will add my own experience. I started college right before my parents got divorced. My dad was making a decent amount of money. Too much to qualify for Pell grants but not enough to really help pay for my education, so I took out loans. When my parents got divorced, I had my mom claim me as a dependent despite her making ...


7

For the first part of your question, the relevant IRS Publications are: IRS Pub 15-B: Tuition Reduction, Working Condition Benefit IRS Pub 970: Employer-Provided Educational Assistance Essentially, an employer can reimburse you for tuition, and, under certain conditions, this will not be included as taxable income for you. The annual limit is normally $5,...


7

I'm guessing you're asking about the US. Please add a location tag to your question. Unfortunately you cannot claim expenses paid for someone other than yourself or your dependents. In IRS publication 970, that deals with education credits, they give the following guidance: Expenses paid by others. Someone other than you, your spouse, or your ...


7

First, the thing between your parents is not your problem. You are not entitled to that money, and trying to gain access to it will only anger them. There's a huge scam around college financing It's difficult to see as a young American because you're only seeing it in one country and one age. But the situation with expensive college is not normal. You ...


6

From the IRS' website: How many annual exclusions are available? The annual exclusion applies to gifts to each donee. In other words, if you give each of your children $11,000 in 2002-2005, $12,000 in 2006-2008, $13,000 in 2009-2012 and $14,000 on or after January 1, 2013, the annual exclusion applies to each gift. The annual exclusion for ...


6

I tend to agree with Jared on this You will need to pick a major that will allow you to repay the debt. I don't know that he explained it very well, however. College is definitely useful for increasing your potential lifetime earnings. Generally speaking earnings go up the more educated you are. But the cost of college is not insignificant Tuition and ...


6

You can easily have a sit-down with your parents, dig out the truth, and figure out how much they are willing to help you. Worst case scenarion, you get no help at all from them, then you must do the following: Fill out your FAFSA (do it regardless of parent help) and figure out how much financial aid you qualify for from the Federal Governemnt, your State ...


5

The total outlay in 1. is $15552 and in 2. is $15560, so if you had the $4000 (and ignoring forgone interest which is very low at the moment), then you'd only need $8 of savings from the tax deduction for it to be worthwhile - I suspect they set it up so that the numbers would be the same modulo rounding errors. From your stats you probably don't have the $...


5

It looks like your visa being refused is entirely irrelevant. What happens in bankruptcy is that all the assets of the bankrupt entity are taken over, liquidated, and the proceeds are distributed to the creditors. You're one of the creditors, and as you've been told - the proceeds are not enough to pay all the creditors in full. This is quite common in ...


4

Let me run some simplistic numbers, ignoring inflation. You have the opportunity to borrow up to 51K. What matters (and varies) is your postgraduation salary. Case 1 - you make 22K after graduation. You pay back 90 a year for 30 years, paying off at most 2700 of the loan. In this case, whether you borrow 2,800 or 28,000 makes no difference to the paying-off....


4

The key to being able to deduct tuition is to have actual expenses that are on the approved list. If the employer is covering the expenses, then you don't have any tuition payment to deduct. You might have other expenses that were not covered by the employer. This could include fees (besides tuition), room, board, books. If the expenses are deductible can ...


4

Does making the $4,000 contribution relieve you of other donations or volunteering to the congregation that you are customarily expected to make? I don't know how the IRS would look at something like this. Is option 2 really a bona-fide deduction? Feels like something that could blow up in your face, particularly with an ex in the picture. Without an ...


4

Of course you can't. You've been reimbursed, you can't claim deduction for something you haven't paid.


4

The 1098-T is not an income statement. It is a statement of the tuition that was paid on your behalf. Normally, this form is used by the taxpayer to claim educational tax benefits. If you have no income, and if you did not receive any taxable scholarships or tuition reduction, you are not required to file a tax return. If your parents or someone else ...


4

The donor might need to pay gift tax if they give money directly to you. Paying the tuition on your behalf (giving the money directly to the school) is exempt from gift tax. But that's not your problem, it is the donor's. There's no tax on receiving gifts, and you're not forbidden to receive gifts by virtue of being on a visa.


4

There are a number of federal tax deductions and credits available for education expenses. They are too numerous to describe here, but the place to get full details is IRS Pub 970. Note that many, but not all, of them require that you be enrolled in a degree program; since this does not seem to be the case for you, you would not be eligible for those ...


4

Choosing to pay off debt vs. make payments should always consider the utility of both: Paying back $13.5k over 9.5 years at 3.5% would mean you pay $2,388 in interest over the course of the loan. Leaving $13.5k in a savings account at a 1.5% APY for 9 years would give you $2,000 in compounded interest. This means you would effectively be paying $400 over ...


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