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Tips for Using Student Loans for Online Education

Student Loan Ranger, currently authored by American Student Assistance®, helps prospective and current students and recent graduates make sense of borrowing options, student debt and loan repayment. The national nonprofit also runs SALT®, a free educational resource that provides personalized tools to help higher education consumers borrow and repay their loans in a way that works for them. The organization’s e-book, “100+ Ways to Get Rid of Student Loans (Without Paying Them),” offers guidance on the options that may forgive, discharge or pay for all or a portion of a borrower’s student loans. Got a question? Email studentloanranger@usnews.com.
You’ve seen the ads on television encouraging students to get a degree online, work at their own pace and save time and money. For some students, online courses are a great way to earn a degree or certificate, especially if their work or family schedules make it difficult to commit to a class that’s held at the same time every week.
But just like choosing a traditional brick-and-mortar college, choosing an online program means doing your homework before starting classes, including making sure you know how to pay for them.​
Studies show that the number of students who complete, or graduate, from their online degree or certificate program is lower than those who enroll in traditional college courses. But while you might not finish your degree, the student loan debt will remain, as well as a higher risk of default.​
In many cases – but not always – an online program may be a cheaper alternative to obtaining a degree at a school’s physical campus. Just as with any big purchase, it’s important to shop around to see which school offers the best value for the credential you are seeking. The luxury of online learning options is that the location of the institution is no longer a restriction to the choices available.
While you can obtain federal financial aid for many online education programs, there are some restrictions. The most significant restriction is attending a school outside the U.S. While you can obtain federal student loans to attend some foreign schools, regulations do not allow any part of that program to be online, even if it’s just a single class.
If you do need to dip into federal or other financial aid resources to afford college, it’s all the more important to ensure the quality of the program is high. Ensuring the program has been accredited by recognized regional or national accreditors is one way to verify that the program meets at least minimum standards – and increases the chances of your credits being transferable if you should decide to attend a different school midway through. Some schools are starting to refuse to accept online transfer credits, regardless of accreditation, due to what they say is low standards in some online programs.
It’s also important to note that you must be enrolled at an accredited institution to receive federal financial aid and most other state and private aid. Your schools should be able to tell you right away if they are accredited and if so by whom.
Online education may also offer a higher risk of overborrowing than a traditional program. Even though your tuition and fees may not be any cheaper, the remainder of your cost of attendance should be significantly cheaper as you won’t be incurring additional transportation or room and board expenses than you had prior to enrolling in school.
While that is usually the case, schools are required to offer similar cost of attendance totals to online students as they do to students attending the same program on campus, which means a high possibility of being offered more loan funds than you’ll need to pay the cost of the program. While it can be tempting to hang on to those extra funds, they can add up quickly to a higher student loan debt than you expected.
The Department of Education’s College Navigator is a great tool to help consumers evaluate all these traits as they research online programs. The site includes statistics on a school’s graduation rate, debt level, student loan default rates and net cost, among other items, and can be valuable for comparing schools and their online – and other – offerings.
source usnews.com

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