Financial Aid Still Possible for Online Students

Articles on Finance | Topics: finance, financial, financing

by Nathanial Jacobs

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.

Historical Quote

There is an enormous chasm between the relatively rich and powerful people who make decisions in government, business, and finance and our poorer neighbors who must depend on these decisions to alleviate the problems caused by their lack of power and influence.

—Jimmy Carter (James Earl Carter, Jr.)

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.

We strive to provide only top rate articles on our website. If there is a specific topic about finance that you do not see but would like us to cover, please contact us here.

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 BusinessInvestingFinance.com.

Health Insurance Plans for Your Pet
By Frank Valencia
Many pet owners dread the news that Rover or Kitty are seriously ill or injured. Too often, an anxious pet-lover is forced to make a fiscal decision when veterinary care is needed, and quite a few have had to endure the heartbreak of saying good-bye to a beloved pet that could be saved -- but only at a cost prohibitive expense....

Financial Aid For School
By Ignatia McIntosh
It costs a great deal of money to raise a family. Everything is so very expensive....

Property Tax Records
By Polly Massey
We live in one of the highest taxed states in the union. We have income taxes, sales taxes and very high property taxes....

Financial Aid Still Possible for Online Students
By Nathanial Jacobs
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....

Irs Tax Refund
By Gilbert Ewing
You may be one of the millions of Americans who get excited around tax season. Chances are you work for some company that automatically deducts all taxes from your paycheck....

Get more articles about finance...