Paying for Your Distance Learning Experience

Today, few students are able to simply foot the bill for a college education. The average cost of a private, four-year college is well over $20,000 per academic year. Divide this figure in half and you have the average tuition for a public university; divide that figure in half again and you have the still formidable tuition at a community college. While receiving an education is well worth the cost, there's still the matter of paying for it in the first place. By taking advantage of distance learning programs, a student can save a considerable amount of money. By utilizing distance learning financial aid, it's possible to save even more.

If students can't pay their tuition costs out of pocket, there are several distance learning financial aid options they can consider. The most appealing of these are grants and scholarships for high school seniors , which essentially offer students free money. They are typically one-time monetary awards paid to students to cover expenses. The problem with grants and scholarships is the competition to earn them. They each have an application process and might also require essays, projects, or interviews, and a student would be competing against a large number of similarly qualified individuals.

While students can hope to gain at least a few grants or scholarships, part of their tuition might still need to be covered by student loans. Student loans tend to carry a lower interest rate than traditional loans and allow for a longer repayment term. Students can borrow money from private lending institutions or from the federal government. In order to borrow federal money directly, students will want to complete the FAFSA to determine their Expected Family Contribution (EFC). Schools will use this to determine the amount of aid they award to a student.

One of the best sources of distance learning financial aid is a tuition reimbursement program offered by a student's employer. A company might pay for an employee's education as part of its benefits package. Certain conditions apply, such as attaining a minimum GPA, and the courses often need to be related to the employee's career. This is an excellent way to fund a distance learning experience because the student doesn't have to 'win' the award over anyone else (as is the case with grants and scholarships). It's a source of college money that the student will be able to count on as long as the company continues its tuition reimbursement program; in addition, unlike a student loan, the student won't have to pay back this aid.

Grants

A college grant is in essence gift money, given to students to help pay part or all of their distance learning expenses. Grants are often a one-time gift, given in a lump sum to the student. Unlike loans, grants do not have to be paid back. Grants are awarded by the federal government, state governments, professional organizations, private organizations, individuals, and even educational institutions. Grants can be awarded on almost any basis, though most commonly they're based on financial need. They can also be awarded based on academic merit, a record of public service or charity work, athletic merit, organizational membership, and so on. Grant amounts run the full gamut from a few hundred dollars to large enough to cover a distance learning student's entire tuition.

The best known grant is the Federal Pell Grant Program, which provides need-based grants to low-income students. A student's financial need is established by the U.S. Department of Education. Students interested in applying for financial aid need to fill out the Free Application for Federal Student Aid (FAFSA). From the FAFSA, the U.S. government determines the student's Expected Family Contribution (EFC). Federal Pell Grants are direct grants awarded through participating institutions to students with sufficient financial need. Over 5,400 schools work with the federal government to support the Pell Grant Program. Grant amounts depend on the student's expected family contribution, the cost of attendance (as determined by the institution), the student's enrollment status (full or part time), and whether the student attends for a full academic year or less.

Pell Grants are not the only grant opportunities available. Students seeking grant money may begin searching for grants by student type or subject-specific grants. Students with minority- group status will find grants available from minority-based organizations such as the Hispanic Heritage Foundation, American Indian College Fund, United Negro College Fund, and even the American Association of University Women. Degree fields that have traditionally suffered from minority underrepresentation provide a wide range of grants to minorities pursuing these degrees. These different opportunities can be found within the university department that students attend.

Most states also provide grants, funded by their state lotteries. These grants are designed to assist students who reside in that state. States and also professional organizations will provide grants to students entering understaffed fields such as nursing or teaching. These grants are usually given in exchange for a commitment of service by the student after graduation. It is possible to find these grants on a state's Web site, but a better idea is to call the department in the state office responsible for awarding grants. Grants also come directly from the college that the student is attending, and students are automatically considered for available grants when they are accepted at the school.

Because grants are very often based on need, students interested in grants need to fill out the FAFSA to determine their expected contribution toward paying for their education. Each government, group, or agency providing grants will require some form of application. This will cover the student's basic information, along with her activities, academic history, and intended major, among other things. Grant committees could also require an interview or personal essay. Once a student researches a list of grants for which he might qualify, he will want to contact the groups awarding those grants to learn what is required in order to apply and the due date for applications. Considering that grant money is essentially free money, it is well worth students' time to apply for any grants for which they may qualify.

Scholarships

A college scholarship is a monetary award based on criteria determined by the awarding party. It can be given on the basis of academic merit, athletic ability, financial need, or other criteria specific to the group giving the award. Like a grant, a scholarship is free money that does not have to be paid back. The difference between a scholarship and a grant is pretty minimal, but grants are generally more often need based, whereas scholarships are less reliant on need-based criteria. Scholarships are available for online learning programs.

Much like grants, there are scholarships available for all sorts of minorities. Students might already be aware of scholarship opportunities based on their specific ethnic status, such as Native American, Hispanic or African American. There are also scholarships provided solely to women, regardless of race. What students might not know is that there are scholarships available for almost every conceivable category. There are scholarships for the blind, for students who are of the Baha'i faith, for students who are gay, for distance learning students, and for students who have cancer, just to name a very few.

In most of the above cases, the scholarships are offered by organizations and professional groups who support people with those characteristics. That is not the only place to find scholarships, however. The vast majority of scholarship funds are awarded via colleges and universities. They often offer their own scholarships. Institutional awards can be offered on a university-wide basis or within a particular college or major. Eligibility for such awards can be based on merit, financial need, intended major, ethnicity, or a variety of other factors. Colleges will typically put applicants in the running for their own scholarships automatically. Many schools, however, also offer talent scholarships that require a special application. These scholarships are often given to students who have special abilities in such areas as art, music, volunteering, environmentalism, science, leadership, and writing. Students can learn about these opportunities by visiting the school's admissions or financial aid offices.

There is a large section of scholarships that are considered contest scholarships, and really only require students to apply in order to be eligible. While these scholarship contests might be easy to enter, they are similar to a lottery and just as difficult to win. Students are better off focusing their scholarship search on more unique and fitting scholarship programs. Each scholarship program will have its own unique application process, but students can expect to submit their transcripts, financial aid paperwork, and one or more letters of recommendation, as well as to fill out a standard application.

Financial Aid

With the rising costs of education today, very few people can afford to pay their full tuition out of pocket. Even taking just one or two distance education courses at a time can be expensive, depending on the school. Sometimes an employer will offer a tuition reimbursement program to help offset the cost, but if students don't have access to that benefit, they'll want to file for financial aid from their given school.

The first step for students interested in applying for financial aid is to fill out the Free Application for Federal Student Aid (FAFSA). A student's financial need is established by the U.S. Department of Education. From the FAFSA, the U.S. government determines the student's Expected Family Contribution (EFC). This EFC is the amount of money a student (or perhaps a student and her family, if the student is a dependent) is expected to contribute to paying for her education. This number is then subtracted from the cost of attending the student's particular school. The difference between these two numbers is the student's financial need or eligibility for financial aid.

The federal government, educational institutions, and various grant and scholarship organizations use this 'financial need' number to help determine the amount of financial aid a student will receive. Ideally, after a student has paid his EFC, financial aid will make up the balance of what's left for tuition, but that is not always possible. The federal government gives money to institutions to disburse to students, and the schools themselves have some money to give, but with so many people going to college, there just isn't enough to go around. In some cases, students might need to take out a private student loan as well, to cover the rest of the cost.

Financial aid is a general term for any money students gain to help pay for college. More specifically, schools will discuss the 'financial aid package' or 'financial aid award.' This is the total amount of aid the school, with the assistance of the federal government, can offer a student. This aid can take many forms. There are Federal Pell Grants, Federal Supplemental Educational Opportunity Grants, Federal Work-Study programs, Federal Perkins Loans, institutional grants, merit awards and scholarships, and Federal Stafford Loans and waivers, among other options.

After a student has been accepted into a school and all of the financial paperwork has been sent, a school will present the student with a financial aid package. From here, a student can decide to accept part or all of the financial aid offered by the school. For instance, say a student is offered a financial aid package that covers the balance of her tuition, but the package includes loans. Students can then seek out private or state grant and scholarship programs in an effort to earn free money for college. If they are given enough supplementary grant money, they may choose not to accept the loan parts of the financial aid package.

Schools only have so much money to contribute to financial aid each school year, so students should be sure to apply for financial aid as early as possible. Any financial award should be examined as soon as it comes in so that students can be certain they have the necessary funds to begin their distance learning program.

Student Loans

While ideally a distance learning student would be able to fund his education entirely from free or gift money such as grants and scholarships, that is rarely possible. Students might be able to make up the difference out of pocket, but more than likely students will require one or more student loans to pay for their tuition. There are two main types of student loans: federal student loans and private student loans.

Student loans differ from traditional loans in a number of important ways. First, they typically carry a lower interest rate than general loans offered by a bank or other lending organization. This rate may be fixed, as is the case with federal student loans, or it may be variable, which is sometimes the case with private student loans. Student loans also offer a longer repayment plan than general loans do, some with terms as long as 30 years, roughly equivalent to the term of a home mortgage. With a general or bank loan, payments on the interest or interest and principal of the loan begin immediately. With student loans, all payments are deferred for as long as the student is in school at least half time. On top of that, student loan servicers offer more flexibility in repayment than banks typically do. They allow for deferments and forbearances when students are having trouble making their payments, and will also set up income-based repayment plans.

The federal government offers a student loan program whereby a student borrows money directly from the U.S. Department of Education, rather than from a bank or other financial institution. This is called a Federal Direct Student Loan or Direct Loan, and Direct Loans are awarded once a semester. The benefits of a Direct Loan are the low rate and the fact that each time a student is issued a loan, the funds are grouped together under one loan, rather than having a dozen small loans. Students do not specifically apply for Direct Loans. When the FAFSA is submitted to their school, the school decides how much the student is eligible to borrow and what type of loan the student may be granted.

The U.S. Department of Education describes their available loans as follows.

• Subsidized: for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half time, during the grace period, and during deferment periods.
• Unsubsidized: not based on financial need; interest is charged during all periods, even during the time a student is in school and during the grace and deferment periods.
• PLUS: unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS Loans help pay for educational expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.

If, as happens in some cases, a student is not eligible for Direct Loans or receives a Direct Loan in an amount insufficient to cover his tuition, the last option is private student loans. These loans function very much like unsubsidized Direct Loans, but are issued from private lending institutions such as TERI, Sallie Mae, and the College Loan Corporation. Like federal loans, they have long repayment terms and deferment or forbearance options. The interest rate on private student loans is often higher than on federal loans. To apply for a private loan, students should first go to their college's financial aid office and see if the school offers any private loans. If not, the school can recommend a legitimate lender. Students then need to apply for the loan directly with the lender.

Employers

When trying to pay for a college education, distance education students find that they have several different options. Most explore the traditional avenues of scholarships and loans but forget to look into their potentially best option, that of employer tuition assistance plans. Tuition assistance programs, if offered by a company, are considered to be part of an employee's benefits package and are generally administered through the human resources department. As with all benefits offered by employers, the assistance offered can vary greatly.

Tuition reimbursement or assistance programs are contractual arrangements between the employer and employee that outline specific terms under which the employer may pay for the employee's continuing education. In most cases, the employer will only pay for courses that can be considered related to the student's role in the company. For example, a company might pay for its accountant to start taking courses in business finance, but it is unlikely to foot the bill for a pottery class. Students will have a certain amount of leeway on this; writing is an essential skill in just about any career, so everyone from IT professionals to criminologists could take courses in the communications field such as technical writing. Students should speak to their human resource manager to see if a course would be covered before they sign up for it.

Tuition reimbursement is not always offered to employees initially. Some companies require students to have been working at the company for at least six months before they qualify for tuition reimbursement. There might instead be a requirement that employees stay with the company for a certain amount of time after they complete their studies. Students will want to ask about the company's reimbursement schedule. Some companies will pay for the course up front, while others will pay the employee back after the course has been successfully completed. It is important to know whether a student will need to come up with the full cost of tuition up front before being reimbursed by the company.

Tuition reimbursement can also depend on the student's performance. Some companies will base the amount of tuition reimbursement on the student's GPA. They might pay 100 percent of the tuition if the student maintains a 4.0, then decrease the percentage they pay as the GPA drops. Other companies will have a flat grade that must be met in order for a course to qualify for tuition reimbursement. For instance, students might need to earn a B or higher in the course to receive reimbursement.