5 Financial Questions to Ask Before Getting an Online Degree

Students should find out about costs for the entire program – and what happens to financial aid if studies are interrupted.​

pic1If you’re not making progress toward your online degree, talk to a financial aid counselor, says one expert.


Online students have many of the same cost, financial aid and student loan questions​ as their counterparts attending brick-and-mortar schools.

But some unique money questions may arise as well.

“There are certainly a few regulations that online students should understand going into the process, given that so many of them are working adults, who attend college part-time,” said Susan Aldridge, president of Drexel University Online, in an email.

For example, enrolling in fewer than six credits or taking a semester or two off may affect aid or trigger loan repayment, says Aldridge.

Other questions may arise about how the program handles financial aid or transfers academic credits.

Below are five money questions that students should ask before pursuing an online degree.

Answers have been edited for length and clarity.

Deana Coady, vice president of student financial aid for Apollo Education Group Inc., parent company of Western International University and University of Phoenix

What is this degree going to cost me, and how am I going to pay for it?
If you’re speaking with a school representative who cannot clearly give you the cost of the program, I’d suggest hanging up the phone. And don’t just think about cost over one year. You want to look at the entire experience as you would with a home or a car. Understand what it’ll cost you over the life of that program and think of loans as an investment.

Betty Vu, director of MBA and MPA programs, California State University—Dominguez Hills

How does the financial aid process work within the program? At some schools the online programs are not a very big component, so they might not have specific financial aid processes that cater to those online programs.

At my school, online programs are not a huge component, so I warn students that their financial aid disbursement is not going to go by the academic calendar. My online program runs on a quarterly system, but the university runs on a semester system.

So, my students can start school in June but the university doesn’t start until August and they don’t disburse financial aid funds until then. That might be a deal-breaker for some students.

Vicky Phillips, 
founder, GetEducated.com

Does your chosen school maintain scholarship programs just for older online degree seekers? 
Look for scholarships just for online degree seekers or adult students. But be wary of Internet ads that promise scholarships for studying online but that only let students use these scholarships at one school or at a group of specific for-profit colleges.

These “scholarship programs” are really advertisements paid for by the limited schools listed on the application forms. These programs are designed to get your name and contact data which is then sold for X amount to the ad client schools.

The schools listed on these programs pay Internet sites upwards of $100 for each student “lead” – that’s the ad term for your contact data – the sites are able to send to their telephone call or recruitment centers. Filling out one of these forms is a great way to end up on the relentless end of a telemarketing loop or email spam operation.

​Meg Benke, past president of the Online Learning Consortium and professor at SUNY—Empire State College

What happens if I need to take a break for an emergency? 
Ask what happens if you get out of step and need to move forward. And leave room in your schedule, so that when life happens, you can catch up. Recognize and give yourself room as a parent or someone caring for an elderly family member, whatever the circumstances. If you’re not making progress, you should immediately get in touch with the financial aid office or student services office. Financial aid has complicated regulations, and it takes a professional to help interpret them.

If you’re not making progress toward your online degree, talk to a financial aid counselor, says one expert.

Cheryl Storie, associate vice president for financial aid, University of Maryland University College

What are the real, fixed costs of this online program? Regulations governing federal financial aid require that schools include tuition and fees, room and board, books, transportation, personal and miscellaneous expenses in their cost of attendance, even though the majority of these costs don’t apply for online institutions.

So, you may be able to borrow to cover room and board, even though the institution doesn’t have dormitories, or transportation, even though you’re attending class online in your living room. You run the risk of over-borrowing, taking out $25,000 thinking that it covers a year’s worth of education, when tuition may have only cost $5,000 or $7,000. It’s not inaccurate, but it’s confusing. ​

Trying to fund your online education? Get tips and more in the U.S. News Paying for Online Education center.

pic3Susannah Snider is an education reporter at U.S. News, covering paying for college and graduate school. You can follow her on Twitter or email her at ssnider@usnews.com.


Admission 101: What You Need to Know

It’s not your parents’ college search. Way back in the days of yore, high school students pored over college guidebooks the size of doorstops, actually used the Post Office to communicate with admission offices, and painstakingly filled in their applications using a typewriter.

Those guidebooks can still be a big help, but students today have many more ways to research and apply to colleges. The Internet has made gathering information easy. But it can be hard to tell whether all that information is reliable. And online applications can make envelopes and stamps seem positively archaic. But electronic applications can be just as tricky as their paper counterparts. What’s a high-tech student to do?

For some helpful hints on using the latest technology in your college search, read on for a quick course in Admission Tech 101.

Lesson One: Just because it’s on the Internet doesn’t make it true. Okay, so that seems really basic for a tech-savvy person like yourself. But it’s important to keep in mind for everyone that ever received an email about a nonexistent virus. (Quick! Forward this to 200 of your closest friends or the world will end!)

This lesson holds true for college-search sites, too. You probably won’t find listings for nonexistent colleges. But you could end up with out-of-date application deadlines or lists of majors. Also, most college search sites include only the colleges that paid the site to list them. That’s why you’ll get different college lists from different sites (even if you plug in the same preferences).

“Use comparative websites only for a general feel and opinions,” advises a representative from the University of Southern California. “Even the best can be only as good as the information they’re given.”

In other words, use the college-search sites as a starting point. Don’t depend on just one site—get lists from several of them. Then go to the websites of individual colleges to get the real scoop.

Lesson Two: Don’t judge a college by its website. You can learn a lot about a college from its Web site. Many colleges have extensive sites that include faculty and student Web pages, detailed information about majors and programs, and even virtual campus tours.

Other colleges have more basic websites: They may have good information, but they’re definitely not high on the “wow!” meter.

Don’t be fooled by the quality (or lack of quality) of a college website. A poor website tells you only that the college has not yet invested a lot in its web presence. It says next to nothing about the quality of the college itself.

“The college with the best Web site—just like the one with the best publication—is not always the best college for a particular student,” says a representative at Alfred University (NY).

The one exception to this principle may be students interested in a high-tech major. A well-done website may indicate a greater commitment to keeping up with the latest technology. That may not matter much to a history major, but a potential Web designer or software programmer may need a college on the cutting edge.

Lesson Three: Go undercover. Of course, you need to know a college’s majors, activities, and application requirements. But don’t stop with the admission office’s home page.

“First, look for the student newspaper online, and second, look for links to students’ Web pages,” says a director of admission at an Oregon institution. “You can find good ‘unofficial’ or ‘undercover’ information on the institution.” Plus, you can e-mail students and ask them questions about the school.

Undercover information can give you a more in-depth view of the college. It can tell you what the hot issues on campus are (fraternities? politics? bad cafeteria food?) and what students are interested in.

Other pages that can give you good information:

  • Faculty home pages—some post detailed syllabuses of their classes.
  • Department home pages—get information about majors from the people who teach them.
  • Student organizations—check out the schedule for clubs and teams or see what resolutions were passed by the Student Senate.
  • Alumni association pages—what are alumni of the college doing now? What is the college doing for its alumni?

Lesson Four: Sometimes old ways are best. One of the best resources in the college search and application process is still your guidance or college counselor. He or she has firsthand information on colleges, has helped hundreds of students through the process, and can get to know you face to face. Even the most technologically advanced website can’t top that!​

Reference: NACAC


The Transition from High School to College

studentsAcademically, the step up from high school to college isn’t as steep as previous transitions may have been. Unless a student takes on an unusually heavy course load, the demands aren’t markedly different from before.

What is different, and what can trip up first-year students, is the atmosphere in which learning and studying take place. College affords young people a level of autonomy they’ve never experienced before. And if they’re attending a college away from home, they don’t have Mom and Dad standing sentinel outside their bedroom door to order them back inside to study for tomorrow’s midterm exam. Most students have the self-discipline to make the adjustment without too much difficulty, but others get swept up in the social whirl of college life.

“We see it here at the University of North Carolina,” says Dr. William Lord Coleman, an associate professor of pediatrics at UNC’s School of Medicine in Chapel Hill. “Kids go downhill or drop out because they can’t get organized enough to forget about the beer-keg party on a Sunday afternoon and go to the library like they’re supposed to.”

Colleges, recognizing the potential perils of youngsters living on their own for the first time, usually insist that new undergrads spend their first year or two living in the residential halls. A 1998 study from the Harvard School of Public Health painted a disturbing portrait of alcohol abuse among U.S. college students. Forty-two percent were found to indulge in binge drinking, which is defined as consuming five drinks in one sitting for men, and four drinks for women.

By far, the highest rate of excessive drinking was among fraternity and sorority members: a staggering 84 percent. The second highest rate, 54 percent, was among school athletes. Third highest were students living in coed dorms: 52 percent. Interestingly, the rate of binge drinking among students living in off-campus housing or in single-sex dorms was lower than the overall average: 40 percent and 38 percent, respectively.

You might want to consider steering an impressionable youngster away from schools with reputations for heavy partying. Believe it or not, every year the Princeton Review ranks the top ten party colleges in the United States, based on surveys distributed to hundreds of thousands of students.

Monitoring College Students From A Distance

Short of secretly taking up residence in an adjacent dorm room, what can parents do to keep tabs on a son or daughter living away from home? Dr. Coleman recommends “the age-old wisdoms: Call regularly, encourage visits home whenever possible and visit your youngster more frequently than just on Parents’ Day. Also, if you can, get to know the parents of the roommate or suite mates. If necessary, you can do a little networking together behind the scenes.”

If you suspect that your youngster is having difficulty adapting to college (homesickness, for example, is common among students living away from home for the first time), encourage him to speak to a counselor at the student health service. If you’re truly worried about his welfare, make the call yourself and ask one of the mental-health professionals there to pay a visit to your youngster or invite him down to talk.

Last Updated
Caring for Your Teenager (Copyright © 2003 American Academy of Pediatrics)
The information contained on this Web site should not be used as a substitute for the medical care and advice of your pediatrician. There may be variations in treatment that your pediatrician may recommend based on individual facts and circumstances

Student Loan Facts They Wish They Had Known

Kim Liao realized the cost of her $22,500 in student loans when she discovered she would be paying $2.23 in interest each day. Credit Bryan R. Smith for The New York Times


How Much Student Loan Debt Should Parents Take On?




4 College Savings Strategies for Parents With Student Loans

A frustrated parent paying bills and budgeting.

Take stock of existing student debt, but don’t delay starting to save for the next generation.


​Lucy Knutson​ says she was fortunate because her parents helped pay for her undergraduate education. But when she decided to go to law school, she had to foot the bill, and she graduated with more than $100,000 in loans.Now that she’s a mom of two, she and her husband automatically put money from their paychecks toward college savings accounts for their almost 4-year-old daughter and 4-month-old son.

“If they want to go to college, I don’t want them to have to worry about the financial implications,” says the 33-year-old​, who lives in the San Diego area.

Still, reducing her student loan debt is a high priority for the Knutsons, and they recently took out a loan against their 401(k) retirement plan to pay off the student debt faster and at a lower interest rate.

More and more parents are being pulled by a financial tug-of-war: They want to start college savings for their children but are still burdened with lingering student debt of their own. About 40 million Americans have at least one student loan to repay, according to an analysis from credit bureau Experian.

“It can be tricky for parents to find the right balance of priorities,” says Heather Jarvis, an attorney and student loan expert who trains and educates advisers on the topic. “We have our own student loans, and we also want to save for our children’s college education so our children don’t have to have as many loans as we do.”

There are some strategies that allow savers to do both.

1. Take stock of your debt: Parents need to understand what types of student loans they have: private or federal. The cost and repayment options can be quite different, Jarvis says.Federal student loans tend to be more flexible and have unique consumer protections, such as disability and death discharge provisions, opportunities to postpone or reduce payments, and repayment options that are tied to income.

“Private student loans are generally more risky and expensive,” she says. “There are many people who should focus on repaying private student loans before beginning aggressive savings for their children’s college education.”

Jarvis suggests making a full list of your loans – both private and federal – and their interest rates. To look up federal financial loans, go to the National Student Loan Data System for Students website or Studentloans.gov.

To get a list of all your student loans, including private ones, get a free copy of your credit report from annualcreditreport.com.

2. Consider debt interest rates: If you have student debt at a high interest rate, focus on paying off debt more aggressively, Jarvis says. Some people are paying interest as high as 8.5 percent for federal loans, while private loans can be between 15 and 18 percent, Jarvis says.

“You should really evaluate and critically assess the cost of your debt, and try to compare that to projected returns on savings and investments,” Jarvis says. “What you’ll find is that when debt is at a high, robust interest rate, it’s tricky to find investments that have those kinds of returns.”

However, borrowers with student loans at lower interest rates could take a slow and steady approach to paying off loans while also focusing on savings.

“If you’ve got loans at 3.5 percent, that’s a good interest rate,” Jarvis says. “That’s not costing you a lot of money. If that’s the case, I think your savings goals can take priority, as long as you know that you’re planning to save for a long enough time that you think you’re going to be able to recoup that difference.”

3. Don’t wait for the perfect time to start saving: “There’s really no good time to get started,” says Felicia Gopaul, a California-based certified financial planner and founder of College Funding Resource​. “So the most important thing is that they get started.”

Gopaul says she sees her clients get caught up in other priorities and never start saving for college. And while having an emergency fund is most important, it’s also relatively easy to open a college savings account with a low minimum.

“Getting started with their college savings often gets put on the back burner because they think they’ve got lots of time, but time kind of marches on whether they save or not,” she says. “My suggestion is always to get started and start saving now.”

4. Make college savings automatic and funnel surpluses there: Gopaul says she’s a big fan of 529 plans, which are tax-advantaged college savings accounts, because parents can set them up so that money is automatically deducted from a paycheck or checking account.

She also likes the fact that parents “can’t touch” money in those accounts because there’s a penalty if you don’t use it for education.

If borrowers get a tax refund or a raise, she suggests using a portion of the money for college savings and putting some of the money toward paying down debt.

Deborah Ziff

Deborah Ziff is a Chicago area-based freelance education reporter for U.S. News, covering college savings and 529 plans. You can follow her on Twitter.


How do I pay for College?

“What Having 8 Children Has Taught Me About College Financial Aid” – By Kirk Ashburn

As a financial professional I deal with hard economic realities every day. That starts at home with the potential million-dollar plus cost to provide a college education to my own 8 children. As a result I have become extensively educated in all the intricacies of financial aid and subsequently have made it one of the core services I provide for my clients with children… Here’s some of what I’ve learned.

The points that follow may seem counter-intuitive. As a result, year after year, billions of dollars go unclaimed by parents and students who could profit from them because they didn’t understand the rules that would allow them to qualify. So keep an open mind…

Here are just 3 of the many critical issues you must understand and address:

The most important decision is the first. To make the first decision the question you must ask, (and the one that guides everything else) is; should my child be going to school now?
I know that sounds like heresy, but hear me out. Many of our country’s greatest successes either delayed their education till they were ready, or never got a degree. A couple examples would be Steve Jobs and Bill Gates, so let’s not pooh-pooh the validity of the question.
To make an informed choice you must begin with the end in mind, which is, what does your child see him/herself doing as a career. Once that path has been identified, all the other choices such as timing and major can fall into place, with due consideration for financial concerns. But the question must be asked and considered…
Research on colleges can provide statistics on the best schools for each vocation. Then you just look for the schools with the most financial aid and the best chance for a successful job search after graduation. This will lead to more acceptance letters and, happily, too more potential aid sources.

Private schools are expensive and public universities will save you money… OR NOT. Assumption: All schools are created equal and will give you the same amounts of money.
Reality: All schools are NOT created equal and will not be able to give you the same financial aid packages. Some private schools have huge endowments and get vast sums from alumni and corporations. These schools have more money to give out and are generally able to meet most or all of a student’s financial need while they are in attendance.
Other schools, like state universities, get no private funds and rely solely on state and federal funds to help fill a student’s need at their school. It can actually end up costing you more to send your child to a “cheaper” school if they don’t have the money to meet your need.
It is very important that you know each school’s history of giving money before you ever apply so you’re not blown away when you get a bad financial aid package from your child’s top choice. With this knowledge you can actually negotiate for the aid your student should be getting. (This is an area where having professional assistance can really pay off)

The big lie. Most middle and upper-middle class parents assume they won’t be eligible for financial aid because they own a home and make of $100,000 per year. This practically qualifies as an urban myth…
There are over 130 billion dollars available each year from the Federal Government, the states, colleges, universities, private foundations and other organizations. Much of it never gets used, but you have to know how to get your “fair share”. Unfortunately, most parents give up before they even start, which is sort of by design.
Don’t believe the lie! If you fall into this category, make sure you apply; you’ll probably be eligible for some money.

There are several other key points that guide this process to a successful outcome. Most of them affect students on an individual basis, and make very dull reading, but they’re definitely things you must know.

Get all the answers.

Because we’ve helped thousands of students and parents with their financial aid packages we have developed a 20-minute process to determine what kind of assistance, if any, we can offer.
Once you have completed this call, you will have all the information you need to decide whether you will benefit from individualized professional assistance or if you can successfully go it alone.

The one thing that I want for every student (including my eight) is that they dream big!

About the author:

Kirk Ashburn has developed a separate and specialized body of knowledge on what makes for success in college planning, retirement planning, tax-free income planning and wealth accumulation. Kirk lives with his lovely wife Priscilla and his eight children in the Chicago area. When he’s not obsessing over the outrageous cost of higher education he likes to go fishing, boating and hiking with his army.


Bigger, Better College Tax Credit

Updated for Tax Year 2014


A key tax credit that helps families pay for college got a major boost in the 2009 stimulus bill. The credit is bigger, covers more years of college, and helps more taxpayers.

The American Opportunity tax credit, previously called the Hope College credit, is valued at $2,500 for 2014, up from $1800 in 2008.

Because a tax credit reduces your tax bill dollar for dollar, this basically means Uncle Sam will give you up to $2,500 per year for each qualifying college student in your family.

And, unlike the old Hope credit, which was available only for a student’s first two years of college, the American Opportunity credit can be claimed for all four years of post-high-school education. You get the maximum credit if you spend at least $4,000 in qualifying expenses, which now include the cost of books as well as tuition and fees.

More credit for lower- and higher-income taxpayers

If you’re a lower-income taxpayer and the credit is worth more than your tax bill for the year, up to 40 percent of the credit (as much as $1,000) will be returned to you as a tax refund. The old Hope credit could wipe out your tax bill but never gave you cash back.

There’s also good news for some higher-income taxpayers: The new rules greatly expanded the number of families who qualify for the credit. The old Hope credit was phased out for single taxpayers with Adjusted Gross Income (AGI) of more than $50,000 and it disappeared altogether at $60,000. For couples filing jointly, the credit phased out between $100,000 and $120,000 of AGI. (AGI is basically taxable income before subtracting personal and dependent exemptions and standard or itemized deductions.)

Now the credit starts to decrease at $80,000 for single taxpayers and disappears at $90,000. For married taxpayers filing jointly, those thresholds are now $160,000 and $180,000.

What if you already used the Hope credit for the first two years of a child’s college bills? If your child is a junior or senior in 2014, you can use the American Opportunity credit for these expenses.

Who qualifies?

The other rules for qualifying for the American Opportunity credit are the same as for the Hope credit.

The student must be enrolled at least half-time in a program pursuing an undergraduate degree or other recognized educational credential. You can claim the credit for expenses paid for yourself, your spouse, or a child who is claimed as a dependent on your tax return. If the student is claimed as a dependent on a parent’s tax return, the parent gets the credit, regardless of who actually pays the qualifying expenses.

The changes in the Hope credit do not affect the Lifetime Learning credit (which applies to higher education not covered by the Hope or American Opportunity credit) for education after the first two or four years, or for classes taken (1) less than half-time or (2 ) not in pursuit of a degree.

The Lifetime Learning credit, which can be claimed for graduate school, for example, or a single post-high-school class, is worth up to $2,000. (The credit is actually 20 percent of the first $10,000 of qualifying costs.) The income phase-out zone is lower than for the new American Opportunity credit. For 2014, the Lifetime Learning credit gradually disappears as AGI rises from $50,000 to $60,000 on single returns and from $100,000 to $120,000 on joint returns.

IRS publication 970 has more information about the American Opportunity, Hope and Lifetime Learning tax credits.

Reference: Tax Credit


What is Form 1098-E: Student Loan Interest Statement?

Updated for Tax Year 2014


If you paid interest on a qualified student loan, you may be able to deduct some or even all of that interest on your federal income tax return. Student loan companies use IRS Form 1098-E to report how much you paid in interest. Borrowers get a copy of this form, and so does the IRS.

Who sends Form 1098-E?

The 1098-E is sent out by loan “servicers” — companies that collect loan payments. Some lenders service their own loans; others hire an outside company to handle it. Loan servicers must send a 1098-E to anyone who pays at least $600 in student loan interest, and they generally must send the forms out by the end of January. If you have outstanding loans with more than one servicer, you may receive multiple 1098-E forms.

If you don’t receive the 1098-E

If you paid less than $600 in interest, you might not get a 1098-E form. If you don’t receive a form, the U.S. Department of Education says you should contact your loan servicer to find out how much you paid in interest.

Check for a phone number on statements sent to you by the servicer. The home page of the servicer’s website should also have information about getting a 1098-E, advises the Education Department. If you have an online account with your student loan servicer, you may be able to login and download an interest statement as well.

What you use it for

You use the 1098-E to figure your student loan interest deduction. You can deduct up to $2,500 worth of student loan interest from your taxable income as long as you meet certain conditions:
• The interest was your legal obligation to pay, not someone else’s
• Your filing status is not married filing separately
• Neither you nor your spouse, if you’re filing a joint return, is claimed as a dependent on anyone else’s tax return
• Your income is below the annual limit

You don’t have to itemize your deductions to claim the student loan interest deduction, but you do have to file your tax return using either Form 1040 or Form 1040A. The deduction isn’t available to those who file the 1040EZ.

Income requirements

Eligibility for the student loan interest deduction is based on your modified adjusted gross income (MAGI). This is a number you calculate when you fill out your tax return. Your deduction is reduced or eliminated at higher income brackets. As of the 2014 tax year:
• For single taxpayers, the deduction is reduced once you have $65,000 of modified AGI and eliminated at $80,000
• For married taxpayers, the deduction is reduced at $130,000 of modified AGI and eliminated at $160,000

Reference: Tax Guides


How much financial support should you provide for your college student?


It is estimated that by the time a single child reaches the age of 18, his parents will have spent approximately $300,000, according to the U.S. Department of Agriculture (which releases annual reports on family spending). And that doesn’t include the cost of college. Of course, this report factors in housing, childcare, food, transportation, healthcare, and a number of other elements. But it comes out to about $13,000-14,000+ per year in expenses for a child in a median-income household (earning roughly $60,000-100,000 annually in taxable income). Unfortunately, your costs don’t end when your kids head off to college. In fact, they could increase significantly. You’ll still have to pay for your own home, car, food, and more, but you’ll also be on the hook for additional living expenses for your kids since they are no longer at home, not to mention tuition, books, fees, and other costs associated with college – unless of course you decide not to pay.

In truth, you have no onus to pay for your kids’ college education. However, most parents feel that it is their duty to ensure that their children attend college so they can start a career and realize their full potential on a professional level rather than toiling away at the dead-end jobs that high-school grads are often relegated to. In short, many parents want to set their kids up for the best chances in life, and that often includes the advanced education and expanded job prospects that college can provide. But you might not have the money to pay for it all, especially if you have a limited income and a large family, and the truth is that you don’t have to. The only question is how much you should pay.

This figure can be difficult to determine. The government has some guidelines in place, which is why you’re required to submit financial information via the FAFSA(based on previous year’s tax returns) when your kids apply for federal financial aid. They expect parents to take responsibility for at least a portion of the expenses associated with sending their kids to college. However, you can always provide more or less, depending on the needs of your children and your own financial situation. A good rule of thumb, in general, is to offer what you can afford while still keeping your own budget in order. There are a couple of good reasons to do this.

For one thing, it’s important to teach your kids to live within their means, and you can set a good example by doing so yourself. This could mean that your kids end up attending a less expensive institution or living at home so that they can save on living expenses and put that money towards higher tuition costs at their school of choice. Or they might be forced to work a part-time job to pay a portion of their own expenses so that they can attend their dream school. Either way, you avoid financial ruin and your kids learn some very adult lessons. Whether you are able to send them overseas to attend Oxford or they stay home and attend colleges like the University of Cincinnati, the most important thing is that you be honest about what you are willing and able to offer in terms of financial support so that your kids can make an informed decision about their future.