Financial Aid Guide For Students at Online Colleges
Cost can be a concern for prospective students considering online college programs.
An old but persistent misconception is that financial aid for online degree programs is limited compared to support for in-person programs.
But in reality, colleges structure the financial aid guide for students process for distance learners identically to their in-person counterparts.
This shouldn’t discourage you from attending a distant college; federal and state governments and individual schools understand your need for funding and will work with you to create a reasonable financial aid package.
Navigating the financial aid maze can be daunting but not impossible, as almost all students are eligible for some type of financial aid, and understanding your options is the first step to financing your education.
Students in online programs may benefit from federal, state, and institutional financial aid, which may take the form of merit-based or need-based scholarships.
What is FAFSA
The FAFSA is a unique form you must fill out to receive any financial aid from the federal government to help pay for college.
More than 13 million students who apply for the FAFSA each year receive more than $120 billion in grants, work-study, and low-interest loans from the U.S. Department of Education.
Many states and colleges also use the FAFSA to determine which students will receive financial aid.
How Is Financial Aid Guide For Students Online Different
In most cases, online students have access to the same financial aid as traditional students.
There’s one complication: Online students must find out if their program is accredited, and tracking down evidence can be tricky. Accreditation is a matter of course for schools.
The U.S. Department of Education maintains a list of approved accreditors, so start there.
The government has begun cutting financial aid to some for-profit schools that draw too much funding from student loans.
Types of Financial Aid for Online Schools
Distance learning students attending accredited institutions are eligible for several online college financial aid types.
1. Federal Loans
This Federal Student Aid Program offers many student loans to help students cover the cost of college. In addition, some programs allow parents to borrow money for their children.
Borrowers must repay the loans plus interest. The government offers many installment programs. Prospective awardees can apply by filling out the FAFSA each year.
2. Direct Subsidized Loan
College students qualify for Direct Subsidized Loans by demonstrating financial need on their FAFSA.
The program offers a low-interest rate. The federal government covers interest while borrowing students to attend school and during this period.
Here, the government sets an annual and lifetime cap on direct subsidized loans. As a result, prospective borrowers should prefer these loans over other types.
3. Unsubsidized Direct Loan
Unlike the others, the Direct Unsubsidized Loan program does not require proof of financial need on the FAFSA. Both undergraduate and graduate students are eligible for these loans.
Interest on the loan begins to accrue once borrowers receive their first distribution. Borrowers are given a six-month grace period after leaving school before they have to start making payments.
4. Direct PLUS Loan
The Direct PLUS Loan program lends money to graduates and students of vocational schools. With this program, parents of university students can get financial assistance by taking a PLUS loan.
An advantage of this program is that the program does not set any statutory financial need requirements before you can access it. Instead, the only thing needed is for applicants to pass a credit check, which is only just standard procedure.
5. Federal Perkins Loan
Federal Perkins Loans has been suspended, as students can no longer take out assistance from here.
Prior to 2017, Perkins Loans offered low-interest rates to qualified undergraduate and graduate students.
Congress stopped funding the program in 2017, and borrowers stopped receiving Perkins loans in 2018. Borrowers with Perkins loans are still eligible for several federal loan repayment options.
6. Private Loans
Private banks and financial institutions lend money to students to cover college expenses. However, these private loans, most times, often come with higher interest rates and fewer repayment options than federal loans, which makes it difficult.
Private loans do not offer grace periods for repayment of loan forgiveness programs upon failure to repay. As a result, borrowers should prefer federal loans whenever possible.
7. State and Institutional Loans
Some states and colleges also offer student loans, in addition to already existing federal and private loans. Like other loans, borrowers have to pay them back with interest.
For this loan, students can apply for state loans through their state’s financial aid program while the School finance offices administer institutional loans.
8. Pell Grants
The Federal Student Aid Program provides Pell Grants to students who successfully complete the FAFSA and meet the system’s financial need requirements.
Pell Grants provide about $6,495 in assistance for 2021-2022. As the name implies, unlike loans, recipients do not repay Pell Grants, making them a great way to pay for online college.
9. Work-Study Programs
Provides lower college costs with no repayment requirement. In addition, federal grants fund military veterans, teachers, and those with high financial needs.
Online students should verify their grant eligibility by completing the FAFSA and contacting their state financial aid office.
Some private organizations, professional bodies, and even colleges usually award scholarships to students studying online.These scholarships provide free money for college with no obligation to repay.
These scholarships are usually based on their major, location, school, and career goals. Many scholarship applications require transcripts, letters of recommendation, essays, and other materials.
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Financial Aid Eligibility Criteria
- Undergraduate students must meet several eligibility rules to receive financial aid. Federal student aid eligibility requirements include attending a qualified school.
- Only accredited institutions can distribute federal aid, so distance learners should choose accredited online colleges.
- Additional requirements for federal aid eligibility include possession of a Social Security number and either U.S. citizenship or stateless eligibility.
- However, some programs, such as the Pell Grant program, require proof of financial need. In addition, some credit programs require at least half-time work.
- Applicants must fill out the FAFSA with their information to confirm eligibility.
- The Federal Office of Student Support tracks students who need this assistance just so they get additional information to verify their eligibility status.
Other Criteria Are:
- A demonstrated financial need
- Must be a U.S. citizen or eligible noncitizen
- Must have a social security number
- Must be accepted in an eligible degree or certificate program
- Must be enrolled at least half-time to receive Direct Loan Program funds
- Must sign FAFSA statements that you are not in default on a student loan or grant and agree that you will only use the money for educational purposes
- Must show that you are eligible for college with a high school diploma, or proof of approved home-schooling
What Does Financial Aid Cover?
- books and supplies
- a computer
- dependent care
There you have it. Financial aid for students online is beneficial to students. Do your part by trying to meet up the necessary requirements and check to see that you are eligible before applying.
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