Although distance learning has a reputation for being more affordable than traditional college, many online students still need help paying for their schooling. Fortunately, there are many financial aid options available to help with tuition and other expenses. Online colleges typically participate in the same grant and loan programs that traditional schools do.
The U.S. Department of Education's federal student aid programs are the largest provider of financial aid in the country. To receive financial aid for college, students need to complete the Free Application for Federal Student Aid, known as FAFSA. This application determines a student's eligibility for financial aid and the level of need. After three to five days of evaluation, you will receive a Student Aid Report, which determines your eligibility for loans and grants from the federal government. The department has also added a financial aid estimator tool called FAFSA4caster, which provides an early estimate of your eligibility for financial aid. This tool not only calculates your expected eligibility for financial aid and grants, but it also reduces the time it will take to complete the FAFSA paperwork. Depending on your eligibility, you can apply for a variety of federal aid programs, including grants and loans. Some aid does not have to be repaid, such as Pell Grants, Federal Supplemental Educational Opportunity Grants, Academic Competitiveness Grants and Federal Work-Study. Federal student loans are long-term with low interest rates and must be repaid. Some federal loans, such as Stafford and PLUS, have relaxed credit requirements, longer repayment terms, fixed cap interest rates and deferment options. If you are a federal loan recipient, it is important that you understand your responsibilities as a borrower and the guidelines for repayment. Check out The Guide to Federal Student Aid for in-depth information on federal aid, terms and agreements, as well as eligibility information and scholarship details.
Some students may find that they need more money than they receive from federal loan and grant programs to pay for other college necessities, such as tuition, textbooks, housing and computers. For those expenses, they can take out a private loan. These loans are not subsidized and are not guaranteed by the federal government. During the current economic crisis, private lenders are scrutinizing loan candidates particularly closely. These loans are available through banks, education loan organizations and from some campuses. Most online schools recommend that students apply for federal loans before private ones, which can be riskier with fluctuating interest rates and fewer deferment options. There are also opportunities for help through state financial aid, employer tuition reimbursement and scholarships.