Guide to Financial Aid for Online Students
Key Takeaways:
- Financial aid at online schools is widely available, and accredited online programs qualify for the same federal aid as on-campus degrees.
- Applying for financial aid can make online education way more affordable than many assume- grants, scholarships, work-study, and loans can all apply to online students, helping reduce degree costs.
- Completing the FAFSA early is one of the most important steps you can take, since some aid is limited and awarded on a rolling basis.
Paying for college is one of the biggest concerns prospective students have. Fortunately, online colleges with financial aid have made higher education far more accessible than many realize.
While earning a degree can significantly , the upfront price tag can give people pause. It wasn't long ago that colleges were steadily increasing tuition costs. But now, according to the National Center for Education Statistics (), inflation-adjusted tuition over the past decade has actually dropped overall (5% at public colleges and 14% at for-profit colleges).
It鈥檚 still easy to be intimidated by high tuition rates, but careful planning and the right resources can help you avoid taking out expensive student loans. Billions of dollars are given out each year in financial aid to make college more affordable- you just need to know where to look.
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jmcomic漫画s and Financial Aid: How It Works, Who Qualifies, and How to Apply
Many people assume online education doesn't qualify for financial aid. While that may have been true 20 years ago, online colleges accept financial aid as long as they are institutionally accredited schools. (All online schools we feature on our site are fully accredited.) If you're still unsure, let's ask a finance professor.
Finance Educator
"The biggest myth is that you can鈥檛 possibly receive any kind of worthwhile financial aid if you pursue an online degree, or that it somehow doesn鈥檛 count as well鈥俰n the eyes of lenders and federal programs. The truth is that many online education programs that are accredited fall under the same federal aid programs as on campus programs, but students rule themselves out of eligibility by assuming that no help will be available, or minimal forms can be accessed."
At its core, financial aid is there to reduce the financial barriers that stand between students and a degree. It's typically used to cover all or part of tuition and education fees. Depending on the funding source, you may also use it for other expenses such as transport, rent, or school supplies.
Nearly three-quarters of U.S. undergraduates receive some form of financial aid, and more than half of college students take at least one online course. Together, these figures highlight how central financial aid is to today鈥檚 increasingly online college programs.
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Different Types of Financial Aid
Almost in the U.S. are currently pursuing a degree, and to do it. Funding for higher education comes in many different forms. The most common types are grants, scholarships, federal work-study, and loans.
Shirshikov: "Students should always first consider money that doesn鈥檛 have to鈥俠e repaid, such as grants and scholarships, and find out if they are eligible for work study. Loans should be part of a financial plan, not free money, which needs鈥倀o be considered relative to the ability to earn an income and time frame for program completion."
Grants
Grants are sums of money awarded by universities, federal and state institutions, and private companies that do not need to be repaid. These are typically one-time awards of varying amounts given to students who have financial need and/or meet minimum academic requirements. In most cases, you can use grant dollars to pay for anything academically related, including tuition, fees, books, or housing costs.
If you want to learn more, check out our guide on Understanding Pell Grants: Your Guide to Federal Student Aid.
Scholarships
Like grants, scholarships are free sources of funding awarded by various public and private organizations to students at accredited institutions, regardless of whether they study on campus or online. They often have requirements students must meet, like demonstrating special skills, participation in extracurricular activities, financial need, or aspirations to meet specific career goals.
Unlike grants, scholarships may be awarded for a given time period, such as a semester or a full academic year, and can sometimes be renewed based on academic performance. Scholarships are mostly used to pay tuition and are a good option for out-of-state and international students who may not qualify for federal or state grants.
Work-study
Often included as part of a federal financial aid package for both undergraduate and graduate students, work-study is a form of funding where students can offset the cost of college by working part-time. Students apply for pre-approved on- and off-campus jobs, earn a paycheck while they're studying, and use their earnings to pay for tuition, transport, rent, or other school expenses. Some online schools offer work-study positions for distance learners on their campuses or with community partners.
Loans
Student loans are often a necessity to cover the cost of attending college, including those enrolled in online programs. After graduation, however, many students struggle to navigate the sometimes complicated landscape of loan repayment. Federal and private student loans are the least popular financial aid option because borrowers must repay them.
Interest rates and repayment rules vary depending on the lender. Students often prefer federally funded loans, as they tend to have lower interest rates and flexible repayment schedules. Although private lenders offer education loans as well, these are less favorable due to higher repayment rates.
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For additional help with college financial planning, you may want to read our guides on How to Make College Cheaper and 5 Financial Mistakes to Avoid When Returning to College.
Applying for Financial Aid as an Online Student
It's important to know which types of financial aid you qualify for and how to apply for funding to make the most of your options. If possible, start early and begin looking in your final year of high school, as some states only award funds until money runs out and many have their own .
Shirshikov: "Engaging with the financial aid office before you enroll, rather than鈥俛fter admission makes a big, measurable difference. Early conversations mean that students鈥俢an structure registration, pacing and documentation in a way that maintains eligibility and minimizes expensive surprises down the road."
Submitting applications as soon as possible after October 1st, the year before you plan to attend college, can help you secure the maximum amount of aid. This timing is especially important for online students, as online schools with financial aid often award grants, scholarships, and institutional aid on a first-come, first-served basis. Applying early gives online learners more access to limited funding sources and helps reduce out-of-pocket costs before enrollment decisions are finalized.
Financial Aid Eligibility
Different types of aid have varying for applicants. In general, you must be a U.S. citizen or eligible non-citizen, such as a U.S. national, lawful permanent resident, or refugee, to receive federal grants or scholarships. You must also have a high school diploma or equivalent, demonstrate financial need, and be enrolled or accepted in an accredited degree or certificate program.
On the other hand, prerequisites for receiving vary based on the jurisdiction. For instance, have their own specific laws about whether undocumented students and DACA recipients are eligible for public assistance. International students generally don't qualify for state aid, but may have access to institutional funding from their college or university.
Beyond these legal provisions, funders typically expect applicants to meet academic requirements like a minimum GPA, or to have completed previous coursework in certain subjects. Students may need to demonstrate financial need for certain grants and scholarships. Professional organizations often fund students who plan to complete their degree in a specific discipline or work in a particular field.
Shirshikov: "Eligible programs are based largely upon accreditation, program format and your status as a鈥俿tudent, not the manner in which it鈥檚 delivered. When there are disparities, they tend to be鈥俠ased on how intensely students are enrolled or how quickly the program progresses, or on institutional policy rather than the online format itself."
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Tips to Help You Navigate the Financial Aid Process
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Tip 1: Fill Out the FAFSA
The first step in applying for most types of funding (grants, scholarships, work-study, and loans) is to fill out the Free Application for Federal Student Aid (FAFSA). This online form collects information about a student's financial circumstances to determine how much money they and/or their family can contribute to their college costs.
The FAFSA acts as a central application for most forms of aid and allows funders to calculate how much assistance a student will need. Many funding organizations and schools use the FAFSA to determine what types of aid you're eligible for, so it's essential to fill out this form correctly and on time.
Shirshikov on common FAFSA mistakes: "Partial income reporting, failure to report updates and lack of response to verification requests are the most disastrous mistakes. Another common problem is not filing early, and need based aid can be capped even when eligibility is high."
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Tip 2: Get Information from the Schools You鈥檙e Interested In
Learning about the aid opportunities available at your prospective college or university can make applying go more smoothly. Grants and scholarships awarded by schools to incoming and continuing students typically have a smaller pool of applicants, so they are easier to secure.
You can find out more about your funding options at a specific college or university by speaking to your high-school counselor or contacting the institution's financial aid department.
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Tip 3: Talk to Your Local Librarian
Librarians can help students find resources for financial aid and college applications, and some libraries even have counseling centers specifically for this purpose. For instance, a librarian may be able to point you to a database of grants and scholarships available to students based on their enrollment status, degree level, and the ethnic or racial group they identify with.
If you are not currently enrolled in a high school with counselors, visiting your local library is an excellent alternative for finding out more about financial aid.
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Tip 4: Rely on Grants and Scholarships First
The best kind of financial aid is the kind that doesn't have to be paid back, regardless of the amount or length of assistance. Grants and scholarships, for example, are essentially free sources of money that are available to high achievers and/or those who need help to pay for school. They don't require you to repay anything or work in return for support.
When applying for funding, prioritize these forms of assistance as they will allow you to focus more on your schoolwork than on earning money.
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Tip 5: Use Loans as a Last Resort
With student debt soaring to roughly per borrower, it's worth spending the time to learn how to earn your degree without borrowing too much money. Using loans as a last resort is the best way to limit your exposure to potentially drawn-out repayment plans.
If you have no other option but to take out a loan, use federal student loans to cover costs like tuition and only take out private loans as a last resort. Federal loans provide many benefits for borrowers that private loans may not offer, including fixed interest rates and income-driven repayment plans.
Shirshikov: "Borrowing must be calibrated鈥倀o outcomes, not availability. Students鈥俿hould determine the minimum amount required for each year of their program and re-evaluate that figure annually, rather than automatically accepting the maximum."
If costs are your #1 barrier to college entry, start with this article: Decoding Tuition, Fees, and Other College Costs: A Practical Guide for Students.
Next Steps
To move forward, focus on a handful of actions that you can start right away. Begin by narrowing your list to 3-5 schools, then submit the FAFSA as soon as possible. Once financial aid offers arrive, ask each school for your estimated net cost after grants. The financial aid process will feel less daunting if you take it one small step at a time.
FAQs About Financial Aid for Online Students
Can You Get Financial Aid for Online Courses?
Yes, you can get financial aid for online courses. Most online students qualify for the same federal financial aid as on-campus students (grants, loans, and sometimes work-study) as long as they鈥檙e enrolled in an accredited program. You'll still need to fill out the FAFSA and meet the standard eligibility requirements to qualify.
This won't apply to every online course, however. Standalone or non-credit courses are often not eligible. Shirshikov, the finance professor we consulted, cautions students to ask about the online format, like accelerated online programs: "Fast-track (or slow-paced!) modes can accidentally disenfranchise a student if they don't鈥俬ave explicit planning done on their behalf."
The bottom line is that policies can vary by school and state, so it鈥檚 always a good idea to check with the school鈥檚 financial aid office to confirm exactly which online courses/programs are covered.
Can I Receive Financial Aid as an Online Out-of-State Student?
Yes, out-of-state students can receive financial aid, though their options may be more limited. As an out-of-state student, you will generally have to rely on federal financial aid. However, many online programs offer in-state tuition rates to out-of-state students, which can result in substantially lower tuition.
Out-of-state students can apply for a range of need- and merit-based scholarships and grants awarded by institutions and various professional organizations. If you are already working, check with your employer as many companies offer tuition assistance to help employees go back to school, and out-of-state students typically qualify for these programs.
What Online Schools Are Accepting Financial Aid? And Does My School Accept Financial Aid?
Always check to see if the school you鈥檙e interested in accepts FAFSA and is authorized to disburse federal student aid. Most online schools with financial aid outline this information in a tuition or financial aid hub, often including a direct link to the FAFSA and the school鈥檚 federal code. If you cannot find any information listed on their website, contact their financial aid office directly.
Schools must be accredited by an organization recognized by the U.S. government to disburse federal funding. You can check your school's accreditation status by searching the U.S. Department of Education's 鈥� a helpful step when comparing online colleges that accept financial aid.
Some programs may have specific enrollment requirements, such as taking classes full- or half-time, for students to receive certain types of financial aid. These requirements can be difficult for online learners to meet, as many who seek distance education are looking for flexible programs that can be scheduled around jobs, families, and other full-time responsibilities. Check your school鈥檚 website or ask their financial aid counselors for enrollment requirements to ensure you can receive funding.
Are There Ways to Qualify for Financial Aid Without the FAFSA?
Filling out the FAFSA may not be necessary for all types of aid, especially those not based on need or family income. Many institutions, including online schools that accept financial aid, may award funding for some scholarships without considering a student鈥檚 FAFSA.
Filling out the FAFSA may also be unnecessary for those who plan to obtain private loans to cover the costs of their education. For these types of financial aid, students or their parents must fill out a separate set of paperwork specified by the lender.
Although the FAFSA may not be an absolute requirement for every student, it is still a good idea to fill it out so you don't limit your financial aid opportunities.
For families looking beyond federal aid alone, you may also want to read about how parents can help pay for college and learn how to successfully negotiate a financial aid package to reduce overall education costs.
Where Can Students Find Reliable Resources To Learn About Financial Aid?
Start with the financial aid office of the school you (or your student) would like to attend. A university's financial aid officers can offer a wealth of information on the different ways to fund college. Financial aid counselors, and even librarians, know about most of the scholarships available to students.
You can also do your own research online. For instance, the U.S. Department of Education鈥檚 website is a great place to find information on federal aid. Another great source is , a nonprofit website that helps students navigate the application process.
Other resources that offer a wealth of information on financial aid, scholarships, and student loan opportunities include:
- : Created by the U.S. Department of Education, this site offers information about filling out the FAFSA and applying for other forms of federal aid.
- : This site offers a complete listing of government-sponsored scholarships, grants, and loans.
- : Students looking into private educational loans can find options on Sallie Mae's website.
- : This website offers the most up-to-date information on legislative policy changes regarding student financial aid.
- Student Loan Repayment Calculator: This tool can help you estimate monthly student loan payments based on loan balance, interest rate, and remaining repayment term. By adjusting these variables, you can compare repayment scenarios, explore how interest rates affect total costs, and better understand how long it may take to pay off student debt.