With the economy the way it is these days, finding a loan to fund your online education may be getting a little tougher. Banks have been pulling out of the private lending game, leaving a narrower set of choices. Requirements have gone up, with lenders requiring higher credit scores and cosigners.
The good news is that with an online education, you won’t have to borrow as much money as you would if you were going to move out of town to live at or near the university. Distance learners generally already have jobs and a stable living situation, or can flex their learning schedule to accommodate a job hunt or a new job. There is no commute to pay for, and in many cases, course material is available online so there may be less in the cost of books. Thus, the prospective borrower would only need to cover the cost of tuition and any material.
How do I get Started?
The first thing to do would be to assess the cost of the online degree you want. This evaluation should be easily done over the phone. Any reputable online school will have someone available to go over the cost of your degree with you and will help you work through the process and give you your options. The benefit of consulting with a representative of the school is that you get an idea of what kind of loans they take, and which ones they can work with you on getting.
Don’t be afraid to shop around. It may take a little work, but different institutions have different costs and different ways of operating, so if you can evaluate according to your bigger picture, the time it would take to complete the course and pay back your loan, how much you can cover on your own, interest rates, credit scores and if there are any ways you can get your employer to reimburse your tuition if the degree is related to your job then you’ll be better prepared to make that loan commitment.
Now that you know which school you want to go to and which loans they accept, it’s time to hunker down and fill some forms.
Just like traditional colleges and universities, most, if not all online institutions take federal grants. If you’ve ever applied for a student loan for a regular college before, you’ll find them familiar: PLUS loans, and Stafford loans. The good news is that the government has increased the amount of money available for the Stafford loan.
To apply for these federal loans, you’re going to have to fill out a FAFSA (Free Application for Federal Student Aid) form. Again, the school’s financial aid counselor should be able to walk you through these forms, if needed.
There are still some private lenders out there willing to fund your education, and you can avail of these programs if you need to fill that gap between what the program costs and what the government is willing to lend you. Standards are going to be tighter with these institutions, and they are not going to be as willing to lend the same amounts they used to without some assurance they’re going to get it back. Be prepared to get less, pay more in return and line up a good credit score, and maybe even a cosigner with a good credit score.
Finding a student loan in this economy is tough enough if you go to a traditional brick and mortar university; trying to get a loan to fund your online degree is even tougher. But, for the persistent student, there are loans for online degrees, if you know where to look and what information to provide.