IMPORTANT NOTE: This information does not constitute financial advice. It is intended to help students and others understand the various financial mechanisms that exist as they are making decisions about pursuing a postsecondary education.
Every effort has been made to ensure that the information provided is complete and accurate. The EAP cannot be held responsible for any loss incurred as a result of the use of this information. As with any financial or tax matter, it is recommended that proper professional advice be sought before any action is taken. All figures cited are current for tax year 2015.
The cost of pursuing postsecondary education and training usually requires a significant investment of time and money. Beyond an individual's own resources, there are a wide range of financial options intended to help make the pursuit possible. However, because the financial options are so varied they can be a challenge to understand. Moreover, unique circumstances specific to each individual add to the complexity.
For students considering a traditional college or university, there are a number of tools available to help students compare costs and financial aid. One such tool is the Net Price Calculator from the U.S. Department of Education. The federal Consumer Financial Protection Bureau also has useful information about paying for college, as well as understanding and managing student debt.
Students and parents who have questions about college and student debt can contact the Wisconsin Department of Financial Institutions (DFI). The DFI website has information on how to plan for college, and points graduates toward Wisconsin financial institutions that offer refinancing for student debt. DFI can be contacted at 608-266-3289.
For many, paying for education and training requires some type of financial aid. This might consist of a grant, scholarship, work-study, or loan. In addition, there are an increasing number of tax incentives available, such as credits, deductions, and tax-free savings programs.
Government and School Sponsored Funding: Scholarships and grants are monies that do not have to be repaid. School sponsored work-study programs involve earning money either on-campus or off-campus during the academic year. Many scholarships, grants, and work-study programs are typically awarded to students who have demonstrated financial need as determined by a federal formula based on the results of the FAFSA (Free Application for Federal Student Aid). As these options provide a debt-free way of funding all or a portion of your education, you should explore these options first. Additional information about financial aid programs is available from the U.S. Department of Education.
Important Information for Students with Federal Loan Questions or Complaints
For questions or complaints regarding active institutions and newly closed institutions, students should contact the USDOE Resource Center at 1-800-872-5327 or the Federal Student Aid (FSA) Information Center at 1-800-433-3243.
If the institution is closed, student should contact the USDOE Ombudsman at 1-877-557-2575 or
https://studentaid.gov/feedback-ombudsman/disputes/prepare. Questions and complaints can also be emailed to firstname.lastname@example.org
In general, the degree-granting institutions approved by the EAP participate in the federal financial aid programs (also known as Title IV). Information on whether a specific EAP-approved school participates in Title IV programs is available when using this website's school and program search feature. Although students attending these institutions are eligible for federal financial aid, they are not currently eligible for state financial aid provided by the state of Wisconsin.
Tuition Payment Plans
Tuition payment plans are an interest and debt-free way to spread tuition payments over several months. This option is best for families who have discretionary income that will cover all of, or a portion of, the gap between the cost of attendance and the financial aid received. When evaluating this option, consider that an enrollment fee or participation fee is often required. Compare this fee to the fee or tax implications of liquidating an asset or the interest associated with a loan.
There are several types of loans available to students. Federal student loans are low interest, long-term loans which offer attractive repayment options. The federal student loan program includes loans for both parents and students. In addition, third-party or alternative student loans are offered by federally sponsored financial institutions such as SLM Financial (Sallie Mae), Key Bank, Wells Fargo, and others. These are often available to students who choose to attend institutions that do not participate in the federal student aid programs. For information on ways to avoid deceptive student loan practices, the Federal Trade Commission and the U.S. Department of Education have developed a student resource guide.
Home Equity Loans
Many parents choose home equity loans or second mortgages because they are readily available – assuming they have equity in their home and good credit. Home Equity Loans are tied to the amount of equity you have in your home. The interest accrued and paid is typically deductible on a federal tax return.
This option is typically not the best choice for students or their families as interest rates on credit cards tend to be high.