How to pay for college online: scholarships, student loans, and more

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Note that the student loan situation has changed due to the impact of the coronavirus outbreak and the relief efforts of the government, student loan lenders and others. Check out our Student Loans Hero Coronavirus Information Center for news and additional details.

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If your online college is eligible for federal aid, you may be able to obtain federal student loans for online courses. If not, you may still be able to access private student loans.

But before you borrow money for school, be sure to apply for grants, scholarships, and other aids that you usually don’t have to pay back.

How to get student loans for online courses

If you need additional funding, here’s how to get student loans for online courses:

  1. Find out if your school is eligible for federal financial aid
  2. Find out if your program is accredited
  3. Compare federal and private student loans for college online
  4. Explore other options if school accreditation is an issue

1. Find out if your school is eligible for federal financial aid

If you want to access federal financial aid (including student loans) for college online, your school must be accredited by an accreditation body recognized by the federal government. The good news is that there are many accredited online colleges that can set you up for federal student loans and financial aid.

For example, around 75% of online-only Capella University students have received financial aid as of December 31, 2019, including federal scholarships, co-op opportunities, and loans. Many more traditional schools, including the public nonprofit giant Arizona State University, offer degrees entirely online.

Find out if your school qualifies by using the Department of Education’s federal school code finder. You can find your school’s code by asking its financial aid office or by doing a search – with “[school name] federal school code ”- online.

The Federal Student Aid Office also maintains a downloadable school code spreadsheet.

2. Find out if your program is accredited

Go further to determine if your course would also be accredited. You can type your school’s name into the Department of Education’s database of accredited post-secondary institutions and programs. You may find, for example, that your school’s nursing department has full accreditation, while its teacher program has lost support.

Use federal agency tools instead of relying solely on your school. A school may tell you that it has the support of an accreditation body, but that body may be questionable. You can also check your school’s accreditation requests using the Council for Higher Education Accreditation’s list of legitimate accreditation bodies.

Confirm your findings with the school’s financial aid office. Next, complete the Free Federal Student Assistance Application (FAFSA) – the FAFSA will determine the amount and type of federal assistance you can receive, including student loans.

Depending on your expected family contribution (soon to be renamed the Student Assistance Index), you may be eligible for Direct Subsidized Loans, a specific type of federal student loan. With these loans, the government pays interest on the debt while you’re enrolled and for the first six months after you graduate, so it’s better than direct unsubsidized loans.

Federal assistance may also be available in the form of scholarships and work-study opportunities, if your family demonstrates financial need.

3. Compare Federal and Private Student Loans for College Online

Whether you are an online or on-campus student makes no difference in the world of Federal Student Loans. The interest rates, repayment terms and other details are the same for each type of loan.

The federal government should generally be your first stop for borrowing because their student loans come with low interest rates and flexible repayment plans. In addition, federal loans are eligible for various loan forgiveness programs.

However, some private student loan companies offer certain protections for borrowers, such as the ability to defer repayment while you are in school or if you lose your job. And if you have good credit or can apply with a creditworthy co-signer, you might find competitive rates on a private student loan.

There is, however, another key nuance of student loans for colleges online: Just because your school is eligible for federal loans does not mean that it will be eligible to work with all private lenders.

You can check with lenders directly if you don’t see your school as an option on your initial loan application. Then use our student loan payment calculator to determine the amount of interest you will be liable for during the term of your loan.

No matter what type of loan you use, borrow only what you need after applying for gift aid like grants and scholarships. The gift aid does not have to be repaid, unlike federal student loans.

4. Explore other options if school accreditation is an issue

You might run into issues when funding your education if you opt for an online college without accreditation. Speak with the school’s financial aid office about your options – and ask them why they aren’t accredited by a legitimate accrediting body.

Often, for-profit colleges (online and on campus) may not have the proper accreditation, so you can’t fund your degree with federal loans.

If you are looking for a certificate for a specific trade and not for an associate or bachelor’s degree, your school might not be accredited. However, there are ways to find student loans for trades programs.

At the same time, even if you can find a reputable lender for your program, you would be wise to question the school for not being accredited. Schools that are accredited offer more student loan options. More importantly, they might also be better suited for preparing you for a career.

Ultimately, attending an online university can save you a lot of money, especially if you don’t have to pay for room and board on campus.

Paying for school will come with challenges whether or not your classroom is virtual. When looking for student loans for online courses, start by looking at your school’s accreditation. This will help you determine if he is eligible for federal and private student loan options.

Rebecca Safier contributed to this report.

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