Wouldn’t it be nice to get certain advantages in college just based on your parents’ affiliations or work history?
Many students know that having a parent who attended a school can give you an edge in the admissions process. If your mother or father graduated from a school you’re interested in, you’d be a “legacy” student at that institution.
Beyond the admissions side of college, however, there are tuition discounts and benefits to be gained based on your parents’ or even your grandparents’ status.
Tuition Exchange Aids Kids of College Employees
For example, kids of academics can qualify for special tuition discounts through a nonprofit called the Tuition Exchange. It’s a coalition of about 625 colleges that gives tuition breaks to the sons and daughters of college employees.
You don’t have to attend the school where your parent teaches or works. Your school merely has to be part of the exchange. To date, Ivy League schools aren’t part of this alliance. But many excellent institutions do participate, such as Smith College, Fordham University, and the University of Southern California.
The Tuition Exchange functions through a reciprocal educational scholarship program. Schools in the exchange offer competitive scholarships to students.
The scholarships cover full tuition, one-half tuition for non-residents at public schools, or offer a rate established by the Tuition Exchange.
For the 2014-2015 school year, institutions whose tuition price exceeds $32,500 can award scholarships for less than their full tuition, but not less than the set rate of $32,500. In 2015-2016, the set rate is established at $33,000.
Those tuition perks also come with nice tax benefits as well – at least for undergraduate students. In summary, most students receiving tuition reductions will get those benefits on a tax-free basis.
According to excerpts from IRS Publication 970, Tax Benefits for Education: “Qualified tuition reduction means a tax-free reduction in tuition provided by an eligible educational institution” … “for education below the graduate level” … “provided to the following individuals: “current employee, former employee who retired of left on disability, widow or widower of an individual who died while an employee, a widow or widower of a former employee who retired or left on disability, a dependent child or spouse of any person listed above.”
Consequently, graduate education is excluded unless it is provided “to a graduate student who performs teaching or research activities.” Additionally, under the tax code, any tuition reduction benefit to a graduate student “must not discriminate in favor of owners, officers, or highly compensated employees.”
Get Legacy Tuition Benefits and Scholarships
Even if your parents don’t work at a college, a slew of other schools also offer legacy tuition benefits and scholarships to children or grandchildren of alumni, helping to further slash higher education costs.
As I outlined in my book, College Secrets, here’s a sampling of these tuition savers at colleges and universities nationwide.
The University of Kentucky offers a Legacy Tuition Program that grants partial tuition awards to eligible non-residents who are children of UK graduates.
At Pittsburgh State University, a Legacy Program helps students save about $7,500 by shaving out-of-state tuition expenses.
Kansas University has a Jayhawks Generation Scholarship Program that gives lucrative tuition discounts to out-of-state freshman whose parents or grandparents graduated from the university. The discounts can equal nearly $50,000 over four years — a massive savings for good students who qualify.
Southern Illinois University has a Legacy Alternate Tuition Rate for entering freshman or transfer undergraduates whose parents or legal guardians are graduates. Under the program, eligible students pay a tuition rate of just 0.80 times the applicable in-state or out-of state cost of tuition.
The lesson here is simple: whatever college or university you attend, always ask about tuition discounts for which you might qualify based on your parents, grandparents or other family ties.
Lynnette Khalfani-Cox, The Money Coach®, is a personal finance expert, speaker, and author of 15 money-management books, including the New York Times bestseller Zero Debt: The Ultimate Guide to Financial Freedom.
Lynnette has been seen on more than 1,000 TV segments nationwide, including television appearances on Oprah, Dr. Phil, The Dr. Oz Show, The Steve Harvey Show, Good Morning America, The TODAY Show and many more.
All information on this blog is for educational purposes only. Lynnette Khalfani-Cox, The Money Coach, is not a certified financial planner, registered investment adviser, or attorney. If you need specialty financial, investment or legal advice, please consult the appropriate professional. Advertising Disclosure: This site may accept advertising, affiliate payments or other forms of compensation from companies mentioned in articles. This compensation may impact how and where products and companies appear on this site. AskTheMoneyCoach™ and Lynnette Khalfani-Cox, The Money Coach® are trademarks of TheMoneyCoach.net, LLC.