Articles on Degrees | Topics: online, degree, degrees, diploma, diplomas
by Quinton Zamora
One of the major myths of online education is that it's impossible to find any sort of student loans or financial aid. Fortunately, this is not the case for those who are willing to look for it. In fact, financial aid is getting easier to find day by day for online students. No longer do you have to sit back and wonder if you'll be able to make ends meet while paying for your education – just like other forms of post-secondary education you can still get loans. The most common form of financial assistance is that of student loans, and student loans are what this article will deal with.
First thing first – does it make sense to pay the extra money and get a student loan? Well, according to statistics from the U.S. Census Bureau those with a master's degree earn an average of $55 300 a year, while those who only have a bachelor's degree earn around $46 300. In ten years, that is almost a difference of $100 000. For a twenty-five year career you would make $225 000 more than the average person with a bachelor's degree. It doesn't take a mathematics genius to figure out that although you may spend $18 000 more for the loans to get a master's degree, the $225 000 difference more than justifies it.
Are all student loans created equal? Of course they aren't. Just like some restaurants will provide you food that's better for you, some student loans will provide money that's better for you. The first type of student loan – and best type – is the government-backed Stafford student loan. Generally speaking these loans carry the lowest interest rate, meaning that you won't drop off into debt. A few years ago the Stafford student loans had an unbelievably low interest rate of 3.42%, which is almost unheard of. It's so rare in fact that this was the lowest interest rate in the past two decades, making Stafford student loans one of the best options there is. Unfortunately not all online programs participate in this program, which means you will have to do some research, to make sure that the program you want to get into does in fact allow for this type of funding.
The other type of student loan would be that of the private student loan. These are available through various finance companies, and while they will pay for your school, there are two very big drawbacks. The first one is that they generally carry a much higher interest rate. This interest rate can vary between four and twelve percent, which is a whopping increase over the government based student loans. There are also various hidden fees that you may have to worry about, which could work to increase rates, further hurting your chances to pay back the loan. The second major draw back is the fact that you will need to pass a credit check. If you have bad credit you're interest rates are going to be much higher than if you have good credit.
| Quote of the Day |
He was good-natured to a degree of weakness, even to tears, upon the slightest occasions. Exceedingly timorous, both personally and politically, dreading the least innovation, and keeping, with a scrupulous timidity, in the beaten track of business as having the safest bottom.
| —Philip Dormer Stanhope, 4th Earl Chesterfield (1694–1773) |
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This can be a huge drawback for anyone that doesn't have perfect credit, as it may work to put them further in the hole than they already are. There is one major advantage that private student loans have over their government counterparts. What's that advantage? Well, that advantage would be the fact that they can loan you more money that the government student loan. This comes in handy if you have to pay a large amount for whatever it is you want to do. However, you have to decide if the higher interest is going to be too much for you to afford – remember the more money you take out on a loan, the more the interest is going to affect you.
In the end it's up to you to decide which type of loan you believe will best suit you. Some people believe that they need the private loan to pay for their education, and are willing to take the chances with the higher interest rate. Others use the government loans, which have a lower interest rate and are less likely to send you spiraling into debt, but which may not provide you with all of the money you need. The choice is yours.
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Please note: All personal opinions expressed in the "Financial Aid Still Possible for Online Students" article belong to the contributing author and are not necessarily shared by SloanSemester.org. |
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