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How to Pay for College without Federal Loans

Alliant International University
Published 12/17/2015
4 minutes read
The content of this page is only for informational purposes and is not intended, expressly or by implication, as a guarantee of employment or salary, which vary based on many factors including but not limited to education, credentials, and experience. Alliant International University explicitly makes no representations or guarantees about the accuracy of the information provided by any prospective employer or any other website. Salary information available on the internet may not reflect the typical experience of Alliant graduates. Alliant does not guarantee that any graduate will be placed with a particular employer or in any specific employment position.

Paying for college can be a serious matter. With the cost of college tuition and student debt becoming a major national issue, higher education isn’t as affordable or available as it once was. A typical method of paying for college is by submitting a Free Application for Federal Student Aid (FAFSA), but federal loans aren’t the best option for everyone. In some cases, federal student aid may not cover all the expenses you need – and some people may not qualify at all. And of course, government-funded loans have to be paid back, and interest rates aren’t always favorable to the recent college grad.

If you’re worried about paying for college and want to explore some options outside of federal student financial aid, Alliant can help. From scholarships and grants to public service opportunities and even tax credits, we’ve rounded up information on a number of alternative financial aid opportunities that can help you pay for school.

Additional Resources

Scholarships

Scholarships are an ideal way to pay for college. Like grants, scholarships provide money for college that you don’t have to pay back. Scholarships are available from a number of sources, including local community organizations. Most colleges also offer a variety of scholarships to incoming students, too. (Learn more about scholarship opportunities at Alliant International University.) The following websites can help you look for scholarships:

Peer-to-Peer Lending

In the event that you need to take out a loan but don’t qualify for federal student aid, you may be able to find loans outside of federal loans. Taking out a personal loan from the bank is a possibility, but you can also skip the bank and try peer-to-peer lending – borrowing from other individuals. A number of websites exist that can help connect you with ready investors.1

Tax Credit Options

Although it might seem like a small option, don’t overlook the ability of tax credits to help fund your higher education. Unlike deductions, which reduce the amount of taxable income, tax credits reduce the actual amount of income tax you pay each year. Two tax credits are available to help offset the cost of higher education: the American Opportunity Credit and the Lifetime Learning Credit.

American Opportunity Credit: The American Opportunity Tax Credit offers up to $2,500 per eligible student and can be claimed for the first four years of higher education. If the credit brings the amount of taxes that you owe down to 0, up to 40% of the remaining credit ($1,000) can be refunded to you. To qualify for the credit, your household income must be $80,000 if filing individually, or $160,000 if filing jointly with a spouse.2

Lifetime Learning Credit: The Lifetime Learning Credit is worth up to $2,000 and can be used for undergraduate or graduate degree programs. Unlike the American Opportunity Credit, this tax credit has no limit on the number of years you can claim it. To qualify for the credit, your household income must be $52,000 or less if filing individually, or $104,000 or less if filing jointly with a spouse.3

For more information on alternative financial aid, we encourage you to check out our other posts: “Paying for College: State and Federal Grants” and “Paying for College: Public Service Opportunities”. To learn more about financial aid opportunities at Alliant, we encourage you to check out our information on Financial Aid and Scholarships at Alliant.


Sources

  1. “Peer to Peer Lending for Student Loans in 2021,” estudentloan, accessed December 14, 2021, https://www.estudentloan.com/blog/peer-to-peer-lending. 
  2. “AOTC: Internal Revenue Service,” AOTC | Internal Revenue Service, accessed December 14, 2021, https://www.irs.gov/credits-deductions/individuals/aotc.
  3. “LLC: Internal Revenue Service,” LLC | Internal Revenue Service, accessed December 14, 2021, https://www.irs.gov/credits-deductions/individuals/llc.

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