If you are interested in heading back to college, but you aren’t sure how you are going to cover the tuition costs, there is good news for you: there are many options available to you, even if you have been laid off and no longer have any income coming in. Here’s a look at a few of the options you might want to consider exploring.

Severance Pay

If you were laid off or if you think a lay off is around the corner, be sure to talk to your employer about receiving a severance package. Within this severance package, you should negotiate receiving compensation to help cover the cost of retraining so you can find a new job.

Government Programs

The Education Department is already encouraging financial aid officers to be a bit more lenient when determining who will receive financial aid, but this isn’t the only way the government can help you pursue your higher education goals.

In general, you need to be pursuing full time work in order to receiving unemployment, but some states will allow you to continue to receive unemployment if you are going to school or if you are in some other form of training program. It is important to note that each state has its own rules on how it doles out unemployment and what criteria must be met in order to qualify, for be sure to talk to the unemployment office in order to learn more about the options that are available to you.

If you lost your job because it was outsourced to another country, you might also be able to receive financial assistance through the Trade Adjustment Assistance program. In order to qualify for this program, you will need to prove that a trade agreement was responsible for your job loss and your company or a group of workers will need to file a petition with the Labor Department.

Grants and Loans

The government also offers a number of different grant and loan programs that can assist you with paying for your education. To be eligible for these programs, you will need to be enrolled at least on a half time basis and pursuing a degree or an eligible certificate. Be sure to fill out the FAFSA to learn more about the free money you might be eligible to receive before you borrow. Even if you do need to borrow money, filling out the FAFSA will help you obtain government education loans that you might be eligible to receive.

When filling out the FAFSA, keep in mind that your eligibility is determined based upon the previous year’s income. Therefore, if you are now unemployed or if you are making less than you were the year before, ask to have a “professional judgment adjustment” used to determine your eligibility. So long as you can document your change of income, the financial aid administrators will be able to have a bit more flexibility when determining whether or not you qualify.

Tax Breaks

The government also offers a number of different tax breaks to people who head back to school. For the 2009-2010 school year, the American Opportunity Tax Credit will be in effect. Unlike the Hope Scholarship Credit, you are not limited to pursuing an undergraduate degree in order to be eligible for this tax credit. Through the American Opportunity Tax Credit initiative, you can receive $2,500 in tax credits to go toward payment of tuition, course materials and other college fees. The credit can be used for up to four years.

The Lifetime Learning Credit is another tax credit you can enjoy when going back to school. This credit can be used for an unlimited number of years and can be used to pay for undergraduate, graduate and professional degree programs as well as for continuing education coursework. This credit will cover up to 20% o the first $10,000 you spend toward educational expenses.

Another option is to take an “above the line” educational deduction. With this option, you can make a deduction of up to $4,000. It should be noted, however, that you cannot take an educational tax credit and deduction at the same time. If you are eligible for both, you will have to choose only one to implement.

529 Savings Plan

If you were saving for your child’s education with a 529 savings plan, you can use this money to fund your education instead. This is particularly beneficial if your child has earned a scholarship or some other form of financial assistance. Fortunately, if you transfer the money from your child’s account into one for yourself, you won’t incur any taxes from the transaction. This money can then be used to help pay for books, fees, tuition and even for a computer. In addition, you do not need to be seeking a degree in order to utilize the funds in your 529 savings plan.

Borrowing from Retirement

For the most part, it is not a good idea to tap into your retirement savings account in order to pay for school. Therefore, this should be considered to be a last resort. In some cases, you may be able to borrow from your 401(k) plan, but you will have to repay your account with interest and you will have to repay the loan within 5 years. Therefore, this may not be a financially wise move to make. Furthermore, if you are laid off from your job, repayment of the loan may become due immediately.

If you have a traditional or Roth individual retirement account, or IRA, you may be able to use funds from that account to help pay for educational expenses without having to pay a 10% tax penalty. In order to avoid the penalty, however, you must be enrolled in a degree program on at least a half time basis. In addition, you will still have to pay income taxes on all of the distributions you receive through a traditional IRA. With the Roth, on the other hand, you will only have to pay taxes on a portion of the distributions.

To learn more about paying for college expenses, visit the Financial Aid section of the Top Colleges blog.