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Borrowing the Money To Pay For Your Online Degree

Borrowing the Money To Pay For Your Online Degree

Guide to Online Education > Paying For Online Education > Borrowing the Money

Your first step should be to speak with a financial aid advisor at the school where you intend to apply before you enroll. Ask what sort of financial aid resources are available at the school or through the school, and which the school accepts. For many students, loans will be a substantial part of the financial aid package. But it costs money to borrow money—rising interest rates make a significant impact on the amount your education will cost you over time. So, in the long run, it pays to borrow just what you need to cover your tuition and books.

Students who are seeking their degrees online have a distinct advantage over their counterparts—they only have to pay for their tuition, fees and books; in many cases, even books are available in electronic format. Online students usually do not have to borrow money for living expenses as most are already employed. And because the courses are taken online (on the student's own time) and not in residence, neither they nor their spouses have to leave their jobs, relocate, or find new housing. Moreover, online students are not subject to out-of-state tuition.

Your next step should be to complete a Free Application for Federal Student Aid. You can complete it online at the Department of Education website or fill out the paper version and mail it in. In most cases, this one application will be used to determine the amount you will be awarded for all federal, state, and school programs.

Cost of Attendance - Expected Family Contribution = Financial Need

After you complete your FAFSA, you will receive a Student Aid Report (SAR). Though funds for higher education are at historic highs, the federal government operates under the premise that your education should cost you something. That amount is your Expected Family Contribution (EFC). It is based upon information you reported on the FAFSA including income, savings, family size, and the number of family members in college. Schools you listed on your FAFSA also receive this information. The school uses the EFC to determine your financial need—the difference between the cost of attendance and your EFC.

You will then receive a Financial Aid Award Letter from the school. This letter details the financial aid package which represents the total amount of aid—grants, scholarships, loans, and work-study--for which you are eligible.

(Download your own copy of the U.S. Department of Education's Funding Education Beyond High School: The Guide to Federal Student Aid (in .PDF) or go to http://studentaid.ed.gov/students/publications/
student_guide/2006-2007/english/index.htm to view it online.)

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