Earning a college degree is a significant investment for all students no matter the learning format. Federal Student Aid helps make education more accessible through grants, which do not require repayment. Students may also qualify for loans which provide a six-month grace period after graduation before repayment begins. Federal Student Aid also offers paid work study opportunities. Students may use the funds for whatever they need, while acquiring professional experience.
Currently, seven million students receive student aid, a 27% increase within the past 10 years. Between 2017-2018, undergraduate grant aid increased by 42%, while loan disbursement rose 9%. Grant assistance also increased by 9% for graduate students enrolled on a full-time basis. While nearly all institutions offer online coursework, more online learners now gravitate towards private nonprofit universities than in the past. Furthermore, as distance learning programs diversify, universities continue to experience a decrease in on-campus student populations.
Online students qualify for the same scholarships as traditional students.Financial aid requires online students to meet the same qualifications as traditional students. Awards vary as student aid considers the difference between the cost of attendance at the applicant’s school and the expected family contribution (EFC). Students should use the FAFSA cost calculator to gauge their EFC; however, federal aid for online students does not include many work study opportunities due to lack of accessibility. Beyond federal aid, distance learners should consider scholarships. Online students qualify for the same scholarships as traditional students. In fact, some organizations specifically dedicate scholarships to online students.
Like any college student, online students begin applying for financial aid by filing the FAFSA. Confirm that the school you have applied to is accredited; this is a necessary in order to qualify for federal aid. For students looking to test-drive online learning without breaking the bank, 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. Completing the FAFSA is your first course of action in funding your education. The FAFSA not only identifies online schools with financial aid opportunities through the government, but also helps students understand their 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 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 daily 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 include program type, student ethnicity, religious affiliation, and more.
- 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 for funding your education.
Why You Should Choose an Accredited School And How to Do It
When seeking online schools that accept 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 may not transfer to another school.
- Your degree may not be recognized by other institutions.
- Your degree may 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 how to find a school’s accreditation status.
- First, type “accreditation,” followed by the name of your school, into a search engine.
- The first result of this 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 classes 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 track, online programs at community colleges 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. 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 the process may seem complicated, but it 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
Get Educated Online College Scholarship $1,000
The Best Schools Online Learning Scholarship $1,000
Scholarship for Single Parents $10,000
ZipRecruiter Scholarship $3,000
Courage to Grow Scholarship $500
Kazimour Scholarship for Undergraduate Students 500
eLearners Military Scholarship $1,000
Earl and Patricia Armstrong Scholarship $3,000
Scholarship America Dream Award $5,000-$15,000
Managing Your Debt
With the cost of higher education, debt is a common 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 avoid campus expenses while keeping their jobs. Below, we discuss how borrowing intelligently, maintaining a repayment schedule, and making responsible financial choices can minimize debt after college.
How to Borrow Student Loans Intelligently
Students should view their education as an investment; borrowing student loan money should follow a methodical approach. Students earning a bachelor’s degree qualify for subsidized loans, which allows them up to six years on a four-year program before the loans begin accruing interest. If students must take out loans, these are the best option because the total amount does not increase if students stick to the time allotment. Contrastingly, graduate students often take out unsubsidized loans, which begin collecting interest immediately. Many students earning an advanced degree also work, which may cause them to enroll part-time. Students should consider the overall sum when taking out these loans. Both types of loans require repayment. Therefore, approaching these funds with the end goal in mind can help students determine what they actually need.
Undergraduate students may not exceed $23,000 in subsidized loans, while graduates cannot exceed $138,500 overall.
Some organizations also offer private loans. Private loans do not follow the same locked interest rates that federal student loans offer, which could cost students more money in the long run. Private loans also consider students’ personal credit scores when determining rates, which could prove difficult for students just starting out as they often do not possess sufficient credit history.
Undergraduate students may not exceed $23,000 in subsidized loans, while graduates cannot exceed $138,500 overall. However, students may want to set their own maximum limit based on how much they can earn in their desired role, the amount of time needed to repay the loans, and how interest impacts the overall amount.
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 payment plan may not be practical for everyone, a personal budget can come 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. Most importantly, try to resist the temptation to borrow more than you need. If you need more than your initial loan provides, you can always borrow more money, 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 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.