There are several different options when
planning how to fund your college education, most of which can be used for
online degrees as well as traditional campus degree programs.
Combining a variety of grants,
scholarships and loans is a highly effective way to pay for tuition and books,
and even to offset the cost of decreasing your work hours for mature students
returning to school. In fact, with most online degree programs, it is possible
to work full-time and still obtain your degree, resulting in less of a
financial burden than a full-time on-campus student. Online education can
decrease the amount of money you may need to repay upon graduation, and allows
you to continue to work and build seniority and experience as you advance your
degree.
There are three main types of funding for
online college programs: scholarships, grants, and student loans. The following
is a brief description of each, along with any special considerations.
Scholarships
Scholarships are unique among college
funding options since they typically have no strings attached and do not ever
have to be repaid. Essentially, they are free money. Scholarships can be
awarded based on financial need, merit (both “need” and “merit” will be covered
in a future lesson), area of study, specific talent (sports, music, academic),
ethnicity, gender, geographic location, or a combination of factors. Often, an
essay or detailed application is required to provide information to the group
offering the scholarship.
Scholarships are typically given for one year; however some may offer
funding for different years of a program of study. Scholarships are offered
most often for undergraduate degrees but can also be offered for graduate level
programs. They can be from a private individual, offered by a group, company or
organization, or offered through a school or program.
According to a recent report by scholarship fund Sallie Mae,
approximately 23% of college costs are paid for by scholarships and grants for
the average family. In addition almost 43% of all families apply for and
receive some type of scholarship or grant to help defer the cost of secondary
education.
Grants
Grants are similar to scholarships in that they don’t require repayment.
However, most grants require that a student meet specific criteria to continue
to receive the grant money. This can include a service requirement during or
after the term of the grant to avoid having to repay. Grants may also be
awarded to graduate level students to help with research projects. Sometimes
the terms scholarships and grants are used to mean the same
thing.
Other grants, such as Pell Grants, are based solely on the financial
needs of the student, usually an undergraduate without an existing two or four
year degree.
It is important to complete a FAFSA (Free Application for Federal
Student Aid) to determine your eligibility for a Pell Grant as well as other
grants and scholarships. The FAFSA will be covered in the next lesson.
Student Loans
There are both government-offered and private student loan options
available. Stafford and Perkins loans are the two most commonly used government
funded student loans. Generally, most students first obtain grant money and
scholarships and then seek the balance of their financial needs through student
loans. Remember that student loans do have to be paid back, typically
within a specific period after completing the degree or program of study.
Interest is charged on student loans and penalties will be assigned for late or
skipped loan repayments.
Most student loans, particularly through private lenders, will require a
good credit history or a cosigner. A cosigner is needed if the student doesn't have a credit rating or any secured assets to offset the value of the loan.
Typically, parents are cosigners to a student loan. However, other individuals,
such as spouses, may also cosign.
Limiting the amount of
student loans (that have to be repaid) and focusing your efforts on getting
grants and scholarships is the best way to lower the long-term cost of your
online degree. Being able to work and earn an income during your education will
also help limit your debt upon graduation, allowing you greater financial
freedom.
