It’s a big step: returning to school. Especially if you’re going back after several years in the workforce. What makes it even tougher? Figuring out how you’re going to pay for it. With so many options, it’s best to map out a financial plan.

Outline Your Finances

First, take time to dig into your financial need. Calculate the total costs of your education, as well as your lifestyle, to gauge whether you’ll need aid and, if so, how much.

Determining your financial need is a required step of applying for financial aid (more on that later) and generally a good idea whether you need help or not.

Aside from tuition, there are quite a few expenses to consider. Housing, food, transportation, books, and supplies are the major spending categories for students. You should also account for outstanding debts, as well as any family members who rely on you financially.

After you have squared away your life obligations, make sure to budget for whether you will attend part time or full time. This will impact your overall financial need.

If you attend full time, you’ll need to cover the cost of full-time tuition and books each semester. You may not be able to depend on supplemental income.

As a part-time student, your educational costs per term will be lower. And if you continue to work, you’ll reduce your financial need.

Once you’ve outlined your cost of attendance and factored in living expenses, you can assess the financial assistance available to you.

Check Out Grants and Scholarships

One of the best ways to finance your education is through grants and scholarships. Unlike loans, these award-based funds don’t have to be paid back, so they can reduce the amount you need to spend or borrow.

It’s important to pay attention to the criteria for each. Determine your eligibility. And weigh the pros and cons of one option over the others.

In some cases, grants may be offered to students in good standing. They might cover the full or partial amount of tuition for a term.

Most grants and scholarships have limited funds. So you should apply early. Also, be aware that accepting grants or scholarships may impact your ability to apply for other sources of funding, such as student loans.

Loans: Federal and Private

Another option—a federal or private loan—can provide additional money for your academic expenses. Loans are broken down into categories based on your need and eligibility.

Federal loans have relatively low fixed interest rates. And negotiating forgiveness, deferment, and cancellation of these loans is simpler than it is for private loans.

It’s important to understand all of your options, as federal loans come with quite a few considerations, such as whether you qualify for subsidized or unsubsidized funds. Similar to grants and scholarships, federal loans also have eligibility requirements.

In short:

  • Unsubsidized loans are for undergraduate and graduate students, and you pay interest.
  • Subsidized loans are for undergraduate students. And you pay no interest while you’re in school if you attend at least half time.

Private loans are, for the most part, lending options for students whose tuition may not be fully covered by federal loans.

Private student loans have similar variables to their federal counterparts. But they often have different interest rates and repayment plans. Carefully read the terms of the loan before you apply. You may find that you can get a lower rate through a different lender, so explore your options.

As all loans must be repaid in full, make sure you understand how each lender will bill you. If you have any questions about your loan options and ensuring financial stability after graduation, visit your school’s financial aid counseling office. Also, see our tips for responsibly borrowing student loans.

Be Smart About Your Finances

Once you’ve calculated your need, applied for the grants or scholarships you’re eligible for, and lined up the different loans you might need to cover the cost of tuition, take a moment to reflect on the bigger picture.

While student loan debt continues to be a burden that most graduates face, there are ways that you can minimize its impact.

For starters, make sure you maintain a cost-efficient lifestyle that is well within your new budget. Students who are earning their degrees after years in the workforce may suddenly have to look at their spending habits through a new lens, which means potentially cutting back on discretionary expenses.

Although this may be difficult to do, keeping costs low and beginning any repayment plans early can dramatically cut down on high-interest rates later on.

In addition, alternative sources for funding can help. Check with your employer about a tuition-assistance program. Look for supplemental scholarship options, such as those offered by or Fastweb, which could help you cut back on the need for federal or private loans.

Of course, these options are not at all exhaustive. There are so many ways to reduce the financial burdens that come with returning to school.

As long as you’re weighing all your options against your actual need and remain diligent in your search for funding, financing your education will be one of the greatest investments in your lifetime.