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Can I get financial aid for my online master’s degree online?

U.S News & World Report reported recently that between 2002 and 2008, the average annual tuition rate for graduate programs increased from $13,600 to $20,800. However, the possibility of long-term financial gain is real; the U.S. Bureau of Labor Statistics (BLS) reports that the median annual salary for someone with a bachelor’s degree is $55,640, as compared to $71,136 for those with a master’s or doctoral degree. This difference in salary drives people towards earning advanced degrees. Nevertheless, when faced with tens of thousands of dollars in school costs, many prospective online masters degree students question whether they can afford it. Luckily, student seeking online masters degree programs generally have the same financial options traditional students do, namely scholarships, financial aid, and employer reimbursement.

Scholarships for Online Students

Public and private scholarships are available for students who seek them and who are willing to work for them. No one will just hand you a scholarship; you have to do research and be willing to take the time to apply. Most importantly, however, you need to do all of this early. Most scholarships are offered in small numbers, have application deadlines, and are only offered a few times a year.

The first place to check for scholarship options is at the school you are or will be attending. The majority of schools offer a small number of scholarships for students who have demonstrated academic success in the past, or come from a less privileged background.

Another place to look for scholarships is through organizations. Some things students can receive scholarships for include being a single parent, having a difficult childhood, and being a member of an organization like the Girl Scouts as a child. Organizations that grant scholarships are very broad in terms of their purpose. For instance, Target offers student scholarships, as does the Peter and Elizabeth C. Tower Foundation, which works to aid people with mental illnesses and disabilities. There are even scholarships for short and tall people.

A third resource that grants scholarships is scholarship contests. These usually require students to apply creative skills and knowledge. To get these, students often must submit an essay related to a particular subject. Finally, scholarship search engines like Fastweb.com and Scholarships.com are a great place to begin looking for the right scholarship.

Financial Aid for Online Students

Federal, state, university, and private financial aid are other resources available to aid students who want to earn their masters degree online. Federal and state financial aid/loans are public financial aid sources. Your search for financial aid should begin by filling out the Free Application for Federal Student Aid (FAFSA). With this form, you can apply to receive state and federal financial aid at low interest rates and with a grace period for repayment. Many federal loans exist, such as Federal Stafford Loans and Federal Perkins Loans. State loans depend on the state in which you reside; CollegeScholarships.org has a list of state scholarships.

Private loans are another option for students, though they tend to have higher interests rates than those granted by federal or state authorities. There are generally two types of private loans. The first is those that cover only educational costs. The second are those cover educational costs and aid students in affording general living expenses. The school you attend may also offer financial aid. The easiest way to gain information on this is to check with your school’s admission and financial aid department.

Employer Reimbursement for Online Students

Your employer may be willing to pay for some or all of your graduate education. They may offer such an employee benefit to attract and retain talented and eager employees, and also receive tax benefits. Employers generally will help you financially with your education under certain conditions, though. Sometimes, you’ll have to work for the company for a specified period of time after you’ve earned your degree; if you do not, you must pay the sum the company contributed. Other times, you must maintain a specific GPA. Regardless, if you work full time and plan to earn your online master’s degree, getting finances from your company will save you money.

Tax Savings

Many online master’s degree graduate students don’t know that they can save money through tax deductions and credits. See the following for some of tax breaks the Internal Revenue Service extends to students:

  • American Opportunity Credit – Extends an annual tax credit of $2,500 for tuition and other college-related expenses.
  • Lifetime Learning Credits – Extends an annual credit of $2,000 for qualifying students’ education expenses.
  • Student Loan Interest Deduction – A tax deduction of $2,500 is extended on students’ loan interest.
  • Tuition and Fees Deduction – Allows students to deduct up to $4,000 from their taxable income.

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