Online degree: Career booster or an expensive hindrance?

NEW YORK -- Earning a degree online seems like a cheap, convenient way to expand professional skill sets. But do hiring managers take virtual educations seriously?

The stigma associated with taking classes over the Internet is a nagging concern for many of those deciding whether to invest serious time and money to advance their careers.

Such fears may be fueled by recently released federal data that suggests graduates of for-profit schools aren't finding as much success in the job market. These schools, which are known for their online career education programs, had lower repayment rates for student loans, according to the data.

The Department of Education plans to enforce new regulations starting in July 2012 that will restrict federal aid for career education programs of less than two years that have too many graduates who can't repay student loans or carry unmanageable debt loads.

In the meantime, here are a few things you might want to know about online degrees.

The virtual elephant in the room

Before you even start looking into online programs, there's the matter of the stigma associated with them. It may seem unfair, but those fears aren't entirely without base.

Only about half of respondents to a Society for Human Resource Management survey this summer said online degrees are just as credible as traditional degrees.

The human resource professionals also said that online credentials were less acceptable for higher-level positions; just 15 percent said online degrees are considered acceptable for an executive-level position.

That said, keep in mind that this is a highly subjective area and that your schooling is just one factor that employers look at.

The field of work you're entering and a company's culture will also influence how online degrees are regarded, notes Lynn Berger, a career counselor in New York City.

"It may be that the person interviewing you got their degree online, too," Berger said.

The matter may not be as big of a concern if your online degree was earned from a traditional, reputable college. The same is true if you earned your degree from a school that isn't widely known as a provider of online education.

That's not to say you should hide that you earned your degree online, but you don't have to make it the dominant description of your education.

The costs are anything but virtual

A common assumption is that online schooling will be inexpensive. That assumption is wrong.

At the University of Phoenix, one of the most well-known for-profit schools, each credit for a master's degree in business administration costs $685. That means earning the 36 credits required for completion would cost a total of $24,660, not including application and other fees.

But keep in mind that for-profit schools don't have a monopoly on Internet courses. The majority of community colleges and four-year public schools now offer at least some online courses as well, according to data from the National Center for Education Statistics.

"Many for-profit schools try to create the impression that they're the only schools offering courses online or at convenient times," said Pauline Abernathy of The Project on Student Debt.

And the average tuition and fees at community colleges last year was $2,500. Traditional colleges typically charge the same amount whether students attend classes online or in person.

With loan repayment rates at for-profit schools a hot topic right now, it should be noted that the majority of students at community colleges do not have student loans upon graduation. Of those that do, the average debt is $10,000.

By comparison, nearly all graduates of for-profit schools have student loans and the average debt is $17,000, according to The Project on Student Debt.

Deciding on a for-profit program

A few points to keep in mind if you're considering a for-profit school.

To start, verify that the school is accredited by visiting www.ope.ed.gov/ accreditation. You can also check the website of the Council for Higher Education Accreditation, at www.chea.org.

But that's just the first step. Even if a school is accredited, be wary of aggressive sales tactics or reluctance to disclose information about pricing. Recent undercover tests by the Government Accountability Office found some for-profit schools used deceptive recruiting tactics and encouraged applicants to falsify financial aid forms.

For-profit schools also tend to do a lot of handholding through the application process to make it easy for students to enroll. Don't let this prevent you from shopping around for other options, rather than signing up for the first school you see advertised on TV.

To gauge how well graduates of a particular for-profit school are doing, check the Education Department's list of student repayment rates at http://tinyurl.com/28fjo3j. Click on the link for "Cumulative Four-Year Repayment Rate by Institution." Keep in mind that rates may differ for particular programs within the school.

Finally, talk to mentors or professionals you know in the field to get their thoughts on your plans to pursue an online degree. They may have some recommendations on a well-respected program or one that others have had a good experience with.

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