What You Need to Know about College Financial Aid

Quick Financial Aid Facts

  • 66% of all undergraduates received some form of financial aid in 2007-2008
  • Work-study jobs accounted for 7% of received aid
  • 52% received grants averaging $4,900
  • The average amount received was $9,100

Source:  http://nces.ed.gov/FastFacts/display.asp?id=31

Paying it Forward

Worried about having to pay back a hefty loan? You should make up more than the cost of the loan, including interest, with your shiny new degree. Using data from from a 2011 ACS study, the Census Bureau estimates that the difference in work-life earnings between employees with high school diplomas and college degrees is around $1 million.[i] The same study reveals that the difference between employees with college degrees and doctorate degrees is another $1 million. So paying for a student loan around $20,000 doesn't seem so challenging after all![ii] Of course, some online colleges cost less than $20,000 so be sure to visit EarnMyDegree.com to learn more about online college education.

Types of Financial Aid

There are varying types of financial aid available:

  • Private or federal loans
  • Federal scholarships and grants
  • Private scholarships and grants
  • Merit based financial aid awards
  • Need based financial aid awards
  • Work-study programs
  • Military loans, grants, and scholarships

Where You Should Begin:  The FAFSA

You've picked out an online degree program that you're excited about. The problem: how to pay for it? Most online degree programs qualify for federal student financial aid, so filling out your FAFSA (Free Application for Federal Student Aid) is the place to start.

Ready? Head online

You're lucky to live in the era of technology. Rather than filling out a stack of forms, you can do virtually online. FAFSA has an informative website, and you can even complete your free application on the Internet by visiting fafsa.ed.gov. Remember, you should never have to pay to fill out a FAFSA application.

Set? Gather information

You will need information to fill out the FAFSA application so gather it ahead of time to streamline the application process. Here are some of the things you should have ready:

  • Your social security number
  • Information on you or your parents' education and income taxes
  • Student dependency information
  • Veteran benefits (if applicable)
  • Information on the school you want to attend

Go! Apply

Fill out your FAFSA with all the required information. There's a lot of material, so double check everything to prevent processing errors. You can also check the status of your application through FAFSA's website around 3-5 days after you submit your online application. Additionally, you can make changes to your application online, if necessary.

The Right Student Loan for You

There are several different kinds of student loans. Some are need-based and have lower interest rates, while others are not need-based and are designed to help pay the family share of costs for education.

  • Federal Perkins Loans: These are need-based, are awarded to students with the most financial need and offer a low interest rate. You don't have to start paying these back until you're done with school.[iii]
  • Subsidized Direct Loans: These loans are also need-based with low interest rates. The government pays the interest on the loan while you are in school.[iv]
  • Unsubsidized Direct Loans: These are not need-based, and your family can get these loans to help you pay your costs. You are responsible for paying the interest while you are in school[v].
  • Grad PLUS Loans: These are for graduate students and are not based on need. You can borrow up to the cost of your education.[vi]

There are other types of loans that are provided by private parties (sometimes banks), loans that parents can get to help their children pay for school, and loans offered directly by a college.

Scholarships: Money for School

The best way to pay for school is with money you don't have to pay back. There are different scholarships that could be available to students each year to help pay for your online education. Remember, begin with your FAFSA.

Where to Find Them

Some schools offer their own scholarships. These are great because you have a lot less competition than with nationwide scholarships. You can find information on the school's website, including requirements and explanation of the application process.

Additionally, there are websites that compile many scholarships available online such as Fastweb or Scholarships.com.[vii][viii] You can search for scholarships using criteria like what you want to study, your ethnic background, or your GPA.

Two Types of Scholarships

Merit Based. Merit based scholarships are focused on factors like your GPA, leadership skills, hobbies, and sports abilities.

Need Based. Need based awards have to do with financial need. When you fill out the FAFSA, you will indicate your income, your family’s income, and other factors that should assist in determining whether you qualify for need based financial aid.

What They're Looking For

Not all scholarships require you to have a 4.0 GPA. Others are granted to minorities, students studying a particular field, or students that have great business ideas. Whatever the qualifications, make sure you meet them. You'll just waste time (as well as the application review boards’ time) if you're not qualified to apply.

What They Pay

Scholarships vary in how much of your tuition and fees they will pay. Some will your entire tuition while others will pay just a portion, or perhaps your book fees. Some have limits for how many semesters they will pay for. If you receive a financial aid reward, be sure to enlist help in interpreting the finical aid award letter. Contact the college’s financial aid office or sit down with a trusted advisor to scrutinize the information. Often times, there may be gaps in the tuition and some awards may be renewable. It’s better to have everything spelled out before you make your final decision about where you want to attend college.

Online Degrees Save You College Costs

If you attend college on a traditional campus, you will probably have more expenses than just tuition like gas for commuting, housing, food, room and board. With an online degree, these costs may be greatly reduced or non-existent.

If you attend college online, you won’t have to pay for a dorm room and commuting expenses. You may even save on textbooks since E-books might be an option for your online courses. Futhermore, you’ll have the flexibility to work your school schedule around your life, and there’s no price tag for that.

 

 


[i] http://www.census.gov/prod/2012pubs/acsbr11-04.pdf

[ii] https://www.collegedata.com/cs/content/content_payarticle_tmpl.jhtml?art...

[iii] http://studentaid.ed.gov/types/loans/perkins

[iv] http://studentaid.ed.gov/types/loans

[v] http://studentaid.ed.gov/types/loans

[vi] http://studentaid.ed.gov/sites/default/files/federal-loan-programs.pdf

[vii] http://www.fastweb.com/

[viii] http://www.scholarships.com/