In the internet age, education is no longer a service offered exclusively by schools and universities on campus. Every day millions of people resort to courses and tutorials offered online to improve their skills and knowledge in several fields.
Some of these courses lead to professional certificates and diplomas, while others just aim to perfect your expertise on a specific topic. Platforms like Coursera, Udemy, LinkedIn Learning and Skillshare specialize entirely in offering courses to online learners. Now, many colleges and universities have also jumped on the online education bandwagon and offer full degree programs through the internet.
According to statistics published by Bay Atlantic University:
Those who plan to enroll in an online degree program (or in any course offered through the web) often ask themselves what the best method to finance their education is. That’s why this article will review the various options to pay for online classes offered by both academic and non-academic institutions.
The good news is that most college and university online degree programs qualify for both federal loans and private loans. Let’s compare these two solutions.
As long as the institution offering an online degree is accredited by the US department of education (check it here), you can qualify for a federal loan.
The main reason federal loans are the preferred choice to cover tuition costs is their lower borrowing cost compared to alternative loans. Based on the information provided by Forbes, the 2022/23 fixed rate on federal student loans is 4.99%
Most of them also don’t require credit checks or a co-signer. Other advantages include the fact that they offer different repayment plans, tax-deductible interest, and a 6-month grace period for repayments after graduation. Moreover, those in financial need can qualify for a subsidized loan, with the federal government covering the interest instead of the borrower.
To be eligible for a personal loan (as well as scholarships and grants), don’t forget to send the FAFSA (Free Application for Federal Student Aid) on October 1 (for the following academic year).
Unlike federal loans, private student loans are offered by commercial lenders. Their interest rate tends to vary based on various factors, though it’s usually higher than federal loans.
The exception is when you have an excellent credit score, which can translate into lower borrowing costs than those you pay on federal loans.
Moreover, private loans are the only options at your disposal when you want to refinance your loan (including your federal loan). This can be convenient if, after graduating, your higher income and financial stability allow you to get better borrowing conditions on a new loan.
Read More: Is It Convenient to Take Out a Private Loan for Education?
Many online learners don’t enroll in online courses to obtain a college or academic degree. Instead, they choose shorter classes aimed at obtaining a specific professional certification. Others are just trying to improve their knowledge in a certain field. Here is a scenario.
But what about paying for an online course? Not always is the money immediately available. Let’s see what options you have.
The less costly (yet longer) way to pay for an online course is to save money before enrolling. Some online courses offer the option of paying in installments. In this case, you don’t have to wait until you have saved the whole sum to start studying (just make sure you save at a rate that allows you to meet each deadline, or you may lose access to the course).
Choosing to save money rather than taking out a loan allows you to avoid borrowing costs and adverse effects on your credit score. Still, you will have to wait longer to enroll in a course, as well as sacrifice other aspects of your life.
Therefore, when choosing between saving and borrowing, it’s helpful to ask yourself the following questions first.
If you opt for the saving option, it can be helpful to make a list of expendable costs (things in your life that you can give up for a while) and look for an online course with the best value for money.
Read More: Saving Money for a Goal.
This is an option to consider if you already have a credit card and the cost of your online class is within the maximum amount you can borrow, and especially when:
In other scenarios, a personal loan is by far the best option to finance a non-academic online class. Also, applying for a credit card just to finance an online course (or various online courses) is not advisable. Credit cards are helpful when you plan to use them on a regular basis.
Let’s say you find yourself in one of the following situations.
Personal loans allow you to borrow the total amount you need and then repay it slowly over a long period. Moreover, many personal loan providers offer more convenient rates than those charged on your credit card debt. Rates are even lower in the case of online lenders due to their lower overhead costs and other factors.
The crucial elements in determining the success of your personal loan application are:
Level Lending offers personal loans between $5,000 and $55,000 for your online classes at very favorable conditions. It’s a great option when you are planning to take more expensive professional courses that can give your career a boost. Plus, completing these courses can also make it easier to repay the loan (and your overall debt) due to the positive effects on your salary.
Call 888-922-4015 to have a chat with our advisors. They will guide you through all the application steps and help you find the best options to achieve your educational goals.