Tax-Saving College Funding Options
If you meet income and other requirements, a variety of grants and tax breaks can help you reduce higher education costs. Examples include:
The federal Pell Grant provided up to $6,195 for 2019-2020. The Federal Supplemental Educational Opportunity Grant (FSEOG) may provide up to $4,000 annually, depending on the availability of the grant at the school.*
Most college or secondary schools offer grants from a variety of private organizations. Two examples include grants that target specific groups of students like future teachers and children of veterans. To receive virtually any grant or loan, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA) form.
Get tax credits — which you subtract from taxes owed — from the American Opportunity Tax Credit and the Lifetime Learning Credit. You can reduce your taxes by up to $2,500 for qualified education expenses. And, if you meet income requirements, you may deduct student loan interest of up to $2,500 from your taxable income