A Brief Look at Financial Aid Options for Online Colleges - Pros and Cons

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Editor’s Note: The original title of this article indicated you could get paid to attend an online college, and it is obvious that both the original writer and the original editor passionately believe this to be true, based on their own experiences. And, while we are sure that possibility exists, if the way you are getting paid is through a student loan, then we find ourselves in agreement with several of the commenters, who have posted that this is a potentially dangerous arrangement. We have kept the original writer’s content in it’s entirety under the ‘Getting Paid for School’ viewpoint, and added some caveats from the editorial staff underneath, who take an opposite viewpoint. What view do you agree with? Chime in to the comments and add your voice to the conversation!

Getting Paid for School: Tuition Reimbursement & Education Grants

Who isn’t looking for ways to make some extra money these days? The state of the economy has people in a panic. Sadly, most people aren’t looking toward the future, but are focused on the here and now because survival itself is a struggle for most of us. However, there really is light at the end of the tunnel. You can meet your needs of today while pursuing the goals of tomorrow. How? Go back to school!

There are a multitude of education grants for online schools, such as the PELL grant and scholarships available to pay for school as well as books. And for once, being a member of the low income bracket works to your advantage! Some grants and scholarships are need based. What this means is that the less money you HAVE, the more money you are OFFERED.

Grants are sent directly to the school. Scholarships are either sent to the school or directly to you. Student loans are sent to the school. Once all the fees are taken out, the school sends you a check for the remaining amount. All you have to do is the schoolwork! It’s not a bad deal when you consider that you are not only making some extra money, but working towards a degree that can secure your future.

Let’s not forget that though some don’t know it, if you are a student and have to cut back hours to make time to study, you may also qualify for unemployment benefits for hours lost. This applies even to online schools. Some unemployment centers even offer help by giving students gas cards to assist with travel costs. This even applies to online courses because students may have to travel for tests and to obtain supplies.

Going to school online offers an even more lucrative option. Consider what it would cost you outside of tuition and supplies to go to school. Perhaps you have to pay a sitter. You will also have to pay gas to get to a traditional school. Maybe you even need to rearrange your work schedule and end up with lost hours so that you can go to school. All of those problems are eliminated when you take your online courses. Though you will have due dates for your assignments, you do them based on your schedule. That means if you can’t sleep at 2 a.m., you can get started on your next assignment! It doesn’t get much better than that!

For information on state grants, go to your state’s official website. For information on federal grants, read more here.

Financial Aid Caveats To Be Aware Of

Grants and scholarships reduce the cost of attending college, but loans are just that - loans! You wouldn’t consider that payment you make to the bank every month on a car loan, a ‘discount’ on the price of your car, would you? Well, then don’t fall in to the trap of thinking a federally funded student loan is a ‘discount’ off the price of attending college. It’s not - it’s a bank loan - only in this case, the federal government is the bank.

You might ask - isn’t getting a federally-funded student loan better? Aren’t their student loan forgiveness programs specifically for those types of loans?

  • There are subsidized loans and there are unsubsidized loans from the government. Often, you might be offered both on your financial aid letter. Do you understand the difference?

  • If you are granted a subsidized loan, the government absorbs the interest on that loan while you are attending college, for the first six months after you graduate and during any deferrment periods.

  • If you are offered an unsubsidized loan, then the interest begins to get ‘added’ to your loan amount immediately. If you choose not to pay on that interest while you attend college, then that interest amount builds over time, effectively increasing the amount you borrowed, and owed.

  • If you don’t pay on your loan, the government can and will garnish your wages, your tax returns, etc. Think about anything you’ve ever heard about the IRS going after someone when they don’t pay taxes, and apply that to what happens when you don’t pay back your student loan.

  • Student loans from the government are rarely ever discharged in a bankruptcy court. It’s actually one of the harder debts to discharge!

  • You may have heard or read that it’s easy to get student loans ‘forgiven’ or cancelled, right? There’s a narrow list of situations that qualify for that, including permanent disability and death. This is a ‘Forgiveness’ program for teachers in very specific situations and public service jobs in again, very specific situations. Perkins loans can also be cancelled, again for very specific jobs and circumstances.

Bottom line, don’t take out student loans ‘blindly’. Make sure you completely understand what you are signing for, how much you will owe, and how easily you will be able to defer the loan, or have it forgiven. And, above all, make sure you completely understand the ramifications should you find yourself unable to pay off those student loans in the future.

This post is part of the series: How to Pay for College

Here we look at some of the costs of going to an online college and how to pay for college when going to school online.

  1. Ideas for How to Pay for College Online
  2. A Brief Look at Financial Aid Options for Online Schooling, Both Positive and Negative