While financial aid packages are similar for online students and those who attend school on campus, the majority of students in online programs also qualify as “nontraditional”. In fact, 64% of fully online undergraduates and 81% of online graduate students meet one or more of the following nontraditional student criteria:
- They qualify as independent on tax forms (cannot be claimed by anyone else as a dependent)
- They have one or more dependents
- They are a single caregiver
- They do not have a traditional high school diploma
- They have delayed postsecondary enrollment
- They are enrolled part-time
- They hold a full-time job
As the largest group of online degree-seekers, nontraditional students may be eligible for unique financial aid and scholarship opportunities beyond the usual channels. For example, many federal, state, and private organizations offer scholarships and grants exclusively for single parents or students who have delayed postsecondary enrollment due to a catastrophic life event.
Today, with a growing number of online schools accepting financial aid, online students can afford a high-quality education at an affordable price. Seeking out an accredited online program in their area of interest is key, as it means the school meets qualifying standards of legitimacy among higher education institutions.
Applying for financial aid for online college begins with the FAFSA.
Accredited programs are also an indicator of an online school that accepts FAFSA. Students who are new to online learning may choose to pursue introductory courses at a community college online, offered by many community colleges as a smart way to ease into virtual learning while avoiding excessive student debt.
You may qualify for federal and supplemental aid based on your family’s income and financial need. As part of a larger conversation, you may want to consider a school’s overall financial “scorecard” when researching online colleges. For example, an online program with high retention, graduation, and job placement rates and low loan default rates is an ideal choice for a student hoping to increase ROI and repay their debt within a reasonable time frame. Below, we will walk you through completing the FAFSA form.
As for any college student, online students begin applying for financial aid by filing the FAFSA. Make a point of confirming that the school you have applied to is accredited; this is a must in order to qualify for federal aid. For students looking to test-drive online learning without breaking the bank, so to speak, many community colleges offer online programs at affordable costs that do not require students to take out big loans. While there are many online colleges that accept FAFSA, not all sites that appear to be FAFSA-affiliated are legitimate. In this guide, we will help point you towards reliable FAFSA resources while avoiding scams.
Top 5 Reasons Online Students Should Fill Out the FAFSA
- FAFSA is the gateway to financial aid. As the starting point for all students seeking financial aid, completing the FAFSA is necessary to determine your first course of action in funding your education. The FAFSA not only identifies online college financial aid opportunities through the government, but is also necessary for each student to understand his or her financial eligibility for additional scholarships, grants, and loans.
- Even though you won’t be living on campus, you will likely still need to take loans to cover tuition, books, and supplies. Financial aid for online college may not be necessary for room and board, but it is a necessity for primary costs including tuition, books, and other supplements to the provided virtual learning materials. Most students still need loans to cover the cost of program fees, new software, and/or hardware required for online coursework.
- If you plan on being a full-time online student, you will also need to take loans to cover living expenses. Even though you are not living on campus, being a full-time online student means you may not be able to also work full time to pay for living expenses. Many online students who enroll full time must take out loans to cover rent, food, and other day-to-day expenses for themselves and/or their dependents.
- You may be eligible for free money, such as grants. There are a variety of grants, or “free money”, available to online students. Grants do not require repayment, and are offered through both public and private institutions. Qualifiers range from program type to student ethnicity to religious affiliation.
- It’s free, so why not? While completing the FAFSA is perceived by many as a tedious process, this free resource is a major asset to all college students. As the universal standard in determining financial aid eligibility among higher learning institutions, the FAFSA is the first step toward uncovering all potential resources available to you in getting help funding your education.
Why You Should Choose an Accredited School And How to Do It
When seeking an online school that accepts financial aid, the importance of choosing an accredited school cannot be overstated. The following are among the primary reasons why:
- If you don’t choose an accredited school you will not get federal funding
- Your credits will not transfer to another school
- Your degree will not be recognized by other institutions
- Your degree will likely not be recognized by potential employers
You can be sure that any school found on our site is guaranteed to be accredited. However, if you are still uncertain about a school you have selected, read on for a simple explainer on how to find a school’s accreditation status.
- First, type “accreditation”, followed by the name of your school, into Google’s search field.
- The first result of this exact search should provide you with the accrediting agency, if there is one.
- Lastly, to confirm legitimacy, cross reference that agency with this official list of accrediting agencies recognized by the U.S. Department of Education.
Top 3 Reasons to Consider Community College
- Online education isn’t right for everyone; community college is a great way to try it out with minimal debt. Jumping straight into a full-time college program can be daunting, in part because of the huge debt you may incur in the process. Trying out an online community college with financial aid, however, may allow for you to gauge your comfort level in the virtual classroom while keeping debts minimal.
- Provides the opportunity to easily change direction if desired. Community college coursework can give you the opportunity to experiment in multiple majors or fields. Should you change your mind about committing to a particular study track, online programs at community college allow you to enroll in another with ease and at minimal cost, compared to exorbitant transfer and program fees incurred by switching programs at a four-year university.
- Once you have completed several semesters, you can transfer your credits to a four-year institution or continue on to get your associate. Most four-year institutions will consider transfer credits for applicable programs, and some even offer accelerated programs leading to an associate or bachelor’s degree. Even though you may need to take your time getting acclimated to online learning, any online coursework you complete can potentially lead to an extended or advanced program down the line.
How to Avoid FAFSA Scams
When preparing to fill out the FAFSA, you may encounter numerous sites offering to help you with your application. While there are some legitimate resources offering assistance to FAFSA applicants at no cost, there are also plenty of scammers attempting to solicit payment from you in exchange for their help. Always remember: FAFSA stands for Free Application for Federal Student Aid, so do not assume that any entity asking for a fee to help you apply is sanctioned by the federal government or Department of Education. Sites charging money to help with your FAFSA form are likely running a scam.
On our site, we offer a free FAFSA guide. We understand that the process may seem complicated, but is a necessity for students applying for financial aid and pursuing college enrollment. As part of our initiatives to empower all students, such as those seeking financial aid for online college, we also offer a comprehensive guide for international students, including FAFSA application assistance. Generally, be cautious of sites asking for payment in exchange for FAFSA-related services, and instead seek help from one of the many free resources offering help to complete your free FAFSA application.
Scholarships for Online Students
Edward Gersich Distance Education Scholarship $1,000
TBD in January 2017
- Undergraduate online student, junior, or senior status at Bemidji State University
- GPA of at least 3.0
- At least 25 years old
Gladys McKinley Distance Learning Scholarship $1,000
TBD in January 2017
- Undergraduate or graduate student, junior, or senior status at Bemidji State University
- Pursuing online teacher education degree
- Resident of northern Minnesota, or with ties to this area
Celebrity Online Scholarship $1,479
End of week 5 in any given term, ongoing
- Online student enrolled at Berklee Online
- Successfully completed at least one Berklee Online Certificate
- Program course
- Recommended by an instructor
- Must not be a prior recipient of any Celebrity Online Scholarship awards
- GPA of at least 3.7
Students at a Distance Scholarship Up to $500
March 1, 2017
- Enrolled at least half time in distance diploma or degree program at Central Community College – Nebraska
- Successfully completed at least six credit hours of distance coursework at CCC in previous year
- GPA of at least 2.5
Robert G. Mayes Memorial Scholarship $10,000
July 31, 2017
- Alumnus of Columbia Southern University seeking an online master’s degree at CSU
- Cumulative GPA of at least 3.0
- Must maintain GPA of 3.0 and continuous enrollment for duration of award
Scholarship may be awarded annually for up to three years or until the student completes their master’s degree, whichever comes first.
Ted Pohrte Distance Learning Scholarship Varies
Up to $225 per semester; Up to $450 per year
November 30 (spring semester); August 15 (fall semester)
- Currently enrolled at Dallas Colleges Online (Dallas County Community Colleges District)
- Enrolled in a minimum of six hours of distance learning at DCCCD
- GPA of at least 2.5
- Have no outstanding financial aid debt with any DCCCD college
Allan D. Sicat Scholarship Up to $1,500
April 1, 2017
- Undergraduate or graduate student enrolled in a distance education program at Kansas State University (K-State Global Campus)
- Active-duty or military veteran
- Cumulative GPA of at least 3.0
- Enrolled in a minimum of three credit hours during semester for which scholarship is awarded
Thomas L. and Jane D. Russell Distance Education Scholarship $1,000
- Completed at least one for-credit course at SUNY Potsdam or other higher learning institution
- Currently registered for credit-bearing course at SUNY Potsdam, in any major
Preference is given to students with financial need and matriculated Crane School of Music majors.
Maxwell and Doris King Scholarship $1,500
January 15, 2017
- Open to online students pursuing a Leadership Educational Administration Doctorate in Higher Education Administration at University of Florida
Dawn Drake Excellence in Distance Education Scholarship $500
February 15, 2017
- Successfully completed at least one distance course at University of Wisconsin-Platteville
- Currently enrolled in an online degree-seeking program at UW – Platteville
- Cumulative GPA of at least 3.0
Managing Your Debt
With the cost of higher education today, debt is a certainty for the average college student. However, by implementing a few smart tips, you can not only manage your debt but extend your savings significantly post-graduation. Online education continues to be one of the best options for financially responsible students, allowing them to save money on campus expenses while keeping their job. Below, we discuss how borrowing intelligently, maintaining a repayment schedule to keep interest low, and making responsible financial choices can minimize debt after college.
How to Borrow Student Loans Intelligently
Once you have determined the amount of money available to you through student loans, it may be tempting to accept the maximum amount. For example, many students assume their debt will be easily repaid after graduation, when they immediately land a great job and can afford regular payments.
In fact, graduates typically take between six months and a year to match their income to their level of education in the workforce.
With the future uncertain, avoiding borrowing too much in student loans may seem counterintuitive. However, implementing a realistic plan for student loan debt management at this juncture is key. By accepting only the funds you need, you are saving yourself money in the long run that would otherwise be put toward larger loan payments, likely with added interest. Planning a budget should be the first step for students accepting financial aid. Try drafting a schedule of reasonable repayment amounts for two months, and try your best to stay to the course, then reassess your needs and expenses. Remember: if you under-borrowed at first but need additional funds, you can always borrow more.
In 2015, studies showed the largest percentage of online students incurred student debt of $5,000 or less, however 20% of students also projected that it would take them at least 10 years to repay their loans. By making a plan to repay your loans within a reasonable time frame after graduation, you will be less likely to incur additional interest expenses over the long term and less likely to default on your loan completely. Though temporary, many students find that pursuing an extra source of supplemental income, such as babysitting, yard work, or restaurant work on evenings or weekends, can help to repay their loans.
Repaying Your Loans
For some students, considering repayment options before graduation may seem premature. In fact, one of the smartest things you can do is to educate yourself on the basics of repaying student loans — well in advance of making your first payment. Drafting a payment schedule that figures into your budget is a great first step, though it can be especially helpful to continue to revisit your budget periodically and revise according to your current financial situation.
Ideally, you would repay the maximum amount on your student loans each month, thus paying them off in a timely manner and avoiding long-term interest fees. While this may not be practical for everyone, this is another stage where a personal budget comes in handy to maintain control over your finances. Aim to make the maximum payment you can afford and, if you find your initial expectations are unrealistic, you can reevaluate and adjust as necessary every three months or so. Loan servicers typically offer a variety of repayment options, which can be renegotiated at any time, for free, by the student.
The quicker you are able to repay your loans, the more you save on interest and fees over time. Much like credit card costs, the additional fees and interest that are added to the core cost of the loan itself will increase the longer the borrowed amount lingers. Some students choose to pursue extra work in order to put their supplemental income toward paying off their loans as soon as possible. Generally, if you find yourself with extra income, paying off more than the maximum payment on your loan while you can will save you money overall.
A Tale of Two Students: How Irresponsible Borrowing Can Damage Your Future
To illustrate the devastating effects of irresponsible borrowing, we would like to share a tale of two students. Student A and Student B are enrolled in the same college degree program and are responsible for paying the same tuition for school. Faced with the same expenses, both Student A and Student B are looking to take out loans to help pay for college, yet they differ in their borrowing approach. While one student takes all the money he is offered and spends like there is no tomorrow, the other borrows minimum amounts and spends responsibly. Let’s explore how this worked out for each of them down the line.
|Student A Maximum Borrowing||Student BMinimal Borrowing|
|Student A, our big spender, took out maximum loan amounts. Since he had borrowed more than enough to pay for tuition alone, he also rents an apartment, buys all new books for all of his classes, and doesn’t feel the need to get a job. He also doesn’t put too much thought into his repayment plan, as this seems so far down the road and he assumes he will have a high-paying job as soon as he graduates. While he does snag a job within six months of graduation, the lifestyle he has become accustomed to is not exactly sustainable with his own entry-level income. He struggles to make the minimum payments on his loan each month.||Student B, on the other hand, took a different approach from the beginning. Sure, he was offered huge loans and tempted to live large in college, but instead he took out minimum loans, lived with his family, and borrowed library books. He also works a part-time job so he can have some income to start paying off his loans as quickly as possible. He even has the foresight to sign up for a Revised Pay As You Earn (REPAYE) plan, though he is well aware he can change at any time if his budget needs revising. After graduation, Student B gets a job within six months and takes a second part-time gig to be able to move into his own apartment and afford his monthly loan payments. When the extra work is especially taxing, he reminds himself that every month he can pay the maximum amount toward his loans is another step toward being completely debt-free in under 10 years.|
It may be easy to see the pitfalls of borrowing irresponsibly when we explain it this way. However, many students continue to struggle like Student A because they are simply uninformed about their repayment options or have trouble managing long-term expectations after graduation. While Student B came out a winner in our tale of two students, you too can “be like B” by considering a few simple steps throughout the borrowing process. Most importantly, try to resist the temptation to borrow more than you need. If you truly need more than your initial loan provides, you can always borrow more money. However, this first step is key to saving time and money, and to avoiding the stress of dragging out your loan payments over the next 20 years.
Over-borrowing also tends to construct unrealistic expectations for future spending. By borrowing only what you need, you can still live comfortably by making a few minor sacrifices in your college years, and you will reap the rewards when your income catches up to your education after graduation. Those who borrow extra loan money for things like rent in college may have every intention of paying their loans off fast, but will likely learn just how quickly this temporary source of income is depleted in the real world. Students who borrow responsibly will have a better chance of avoiding high-interest payments and defaulting on their loans.
Additional Financial Aid Resources
- StudentLoans.gov The official hub of all-things-student-loans, hosted by the U.S. Department of Education, this site offers a wealth of resources including financial counseling services, an interactive repayment estimator tool, and information about fulfilling TEACH grant service terms.
- StudentAid.ed.gov The federal student aid branch of the USDE provides comprehensive information and support for students applying for all forms of financial aid, starting with the FAFSA and potentially including scholarships, grants, and loans. This site offers definitive descriptions of the different types of aid, as well as links to available opportunities.
- FAFSA Online The official site for the Free Application for Federal Student Aid offers an interactive “help” tool, contact information, and links to affiliated government sites. Applicants may apply online, download the application as a PDF, or call to request a hard copy via the USPS.
- National Student Loan Data System The NSLDS is the central database for all loan information pertaining to student aid, maintained by the U.S. Department of Education. Here, in one place, students can create a username and password in order to view records and arrange repayment of loans to individual lenders as necessary.
- FedLoan Servicing As a primary lender of student loans affiliated with the USDE, FedLoan Servicing offers comprehensive loan management, repayment options, and other services through a secure online system. Here, students can update account information, including changing their payment due date or payment plan, entirely online.