• Federal tax credits and deductions can help. Many upper-income families are eligible for the federal education tax credit and deduction. The tax credit is available to households with adjusted gross incomes (AGI) as high as $180,000. In fact, 21 percent of tax credit dollars went to households with AGIs higher than $100,000, and 57 percent of tax deduction dollars went to households with AGIs between $100,000 and $160,000. The tax credit and deduction on average are worth $1,330.
• College loans. According to the Institute for College Access and Success, 71 percent of college graduates compile an average debt of $29,400. Indiana is below the national averages, with 64 percent of graduates holding average debt of $27,886.
Just as you should not commit to a large mortgage for a house you cannot afford, you also should borrow wisely for college. According to the Indiana Commission for Higher Education (www.learnmore.org), total college loan debt should not exceed the student’s expected first-year salary.
Lower your debt further by earning your degree in four years (or less). The average student loan per school year is $4,900. A student who graduates in four years would have student loan debt of $19,600 (33 percent lower than the national average).
• Two-year public institutions can be an affordable alternative. Two-year schools can help you save money. You can earn an associate degree in two years and then transfer those credits to a four-year school if you choose to pursue a bachelor’s degree. Full-time students in public two-year colleges on average receive enough financial aid to pay for tuition and fees, plus another $1,550 to pay other expenses.
• Search for scholarships. A good place to start: www.triptocollege.org
• Other families have figured this out, and you can, too. Despite financial challenges, the number of students going to college and graduating is rising. Since 2005, the number of undergraduate students has increased by 1.9 million. Between 2001 and 2011, the number of associate degrees awarded increased by 63 percent, and the number of bachelor’s degrees increased by 38 percent.
• The payoff is worth the effort. Median family income for families headed by a four-year college graduate is $101,909, more than double the median income for families headed by a high school graduate.
Bill Stanczykiewicz is president and CEO of the Indiana Youth Institute. He can be reached at firstname.lastname@example.org.