Exactly How Much
Financial Aid Will You Need?

Even if your online degree is going to give you more earning power, you should approach financial aid for college with the same goal as any other student: to emerge from school with as little debt as possible.

It can be tricky to figure out exactly your total college tuition. While online learning degrees are generally lower in cost than traditional ones, the fact is that you can anywhere from $10,000 to $110,000. in total on a four-year undergraduate degree whether you take classes online or through elearning.

Many financial writers have predicted that the cost of college is likely to level off in the coming years. But it’s not happening yet. In fact, one of the key things you don’t want to overlook is that that your tuition is probably going to go up about 7 – 10% each year. That means you may need more money for college than you think from just looking at this year’s tuition rates, because you’ll be paying far more at the end of your degree program than you did at the beginning. It’s a particularly important issue if, like many online students, you take some breaks from your study program and wind up using more than two years for an associates degree or more than four years for a BA or BS.

Saving With A State School?
State schools and community colleges have traditionally been a great option for students with limited financial resources. But not all state schools have full-scale online degree programs, and economic conditions are forcing up the tuition at many state universities. Some state colleges in financially-challenged Michigan, for instance, have boosted tuition rates by 14% a year recently, while Illinois costs have gone up over 11% and the University of Kansas recently hiked its tuition rates by a whopping 16%. In fact, overall, The College Board says that from 2001 to 2006, the average tuition for university degrees online at public institutions jumped 35% after adjustment for inflation, the biggest jump ever recorded for a five-year period.

Distance Learner Advantage
The silver lining here for online learners is that state schools often don’t charge higher fees if you are an “out of state” student, as they do with students who actually attend live classes. As a result, you can shop for the best bargains in distance learning on a national basis, rather than having to be restricted to your own home state.

Just remember that in estimating the cost of university degrees online, you need to look at more than just the tuition. Although distance learning eliminates travel costs, food plans and dormitory fees, you still need to consider the costs of internet connectivity, any special software you may require and computer hardware.

According to the American Council on Education, the median amount of total debt that students were accumulating on a bachelor’s degree was about $14,671 at public schools about just over $17,000 at private colleges (numbers are for 2004, the most recent year studied). Master’s degree students borrowed closer to $26,000 in total to get their graduate degrees at public universities and about $29,000 at private schools.

But it’s possible to pile up far more debt for college if you’re not careful. Obviously, as far as loans and other types of college aid are concerned, you want to consider how much you’ll earn in your particular career specialty once you graduate. Students are often willing to take on more debt for finance MBA than for a nursing degree, because they know the payoff will be bigger. Spend some time learning what you will be able to earn with your degree before you choose a school. (Read A Word to the Wise: Why You Don't Want to Default on a Government College Loan)

New Benefits From Washington
The health reform legislation recently signed by President Obama contained some important changes for college financial assistance that didn’t get a lot of coverage in the press, but which you should know about.

• New income-based repayment plans will peg your loan fees more closely to how much money you earn after school, which will provide relief to many graduates struggling to pay off their financial aid for college.
• Students who meet the terms of these income-based payment plans will owe no more money after 20 years, even if they have not paid down their full balance, and graduates who go into public service will have their balances forgiven after just 10 years. These provisions, however, don’t kick in until 2014.
• Minority-serving schools and historically black colleges and universities get about 2.5. billion in new aid from the government.
• Federal government loans are now administered though school financial offices, rather than through private banks or other financial companies.
• Maximums on Pell Grants will increase at the same rate as the consumer price index starting n 2013. Critics had claimed that the grants were not keeping up with tuition cost rises.

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