Online education is becoming more popular and accessible, especially after the COVID-19 pandemic. Many students opt for flexible, convenient, and affordable online programs. Online education is not necessarily cheap, and many students may wonder if they can get student loans for online colleges to help pay for their online degree.
The answer is yes, you can get student loans for online colleges, as long as the school and the program meet specific criteria. In this EDU Blog, we will explain how to find out if your online school is eligible for federal and private student loans and what steps you need to take to apply for them.
Federal Student Loans for Online Colleges
Grants, work-study, and loans are some types of federal student aid.
Federal student loans are a good option if you need to borrow money for college. They have low-interest rates, and you can choose from different ways to pay them back. You can also pause or reduce your payments if you have financial difficulties or even cancel some of your debt in certain situations.
Criteria for federal student loans
To get federal student loans, you have to meet some basic criteria, such as:
Being a citizen or eligible non-citizen of the host country
Having a valid Social Security number
Having a high school diploma or equivalent
Being enrolled at least half-time in an eligible degree or certificate program
Maintaining satisfactory academic progress
Not being in default on any federal student loans
- Completing the Free Application for Federal Student Aid (FAFSA)
A Guide to Federal Student Aid for Online Education
If you want federal student loans for online colleges, you need to fill out the FAFSA. This form asks about your money and your school. It calculates how much aid you can get based on two factors: how much your family can pay (Expected Family Contribution – EFC) and how much your school costs (Cost of Attendance – COA).
But not every online school can get federal student aid. The school must have a federal accreditation, which means it meets some quality and honesty standards. The school must also join the Title IV program of the Department of Education, which lets the school use and manage federal financial aid.
You can use the College Navigator tool from the National Center for Education Statistics (NCES) to find out if your online school is accredited and Title IV eligible. You can search for your school by name or location, and check its accreditation status and financial aid information.
If your online school is eligible for federal student aid, you can complete the FAFSA online at fafsa.gov or through the myStudentAid mobile app. You will need to provide some personal and financial information. You will also need to list the school code of your online school on the FAFSA.
After you submit the FAFSA, you will receive a Student Aid Report (SAR), which summarizes your FAFSA data and indicates your EFC. You will also receive a financial aid offer from your online school, which details how much aid you are eligible for from various sources, including federal student loans.
Types of federal student loans
The types of federal student loans that are available for online students are:
Direct Subsidized Loans: These are loans for undergraduate students with financial needs. The government pays the interest on these loans while you are in school and during certain periods of deferment.
Direct Un-subsidized Loans: These are loans for undergraduate and graduate students regardless of financial need. You are responsible for paying the interest on these loans during all periods.
Direct PLUS Loans: These are loans for graduate students or parents of dependent undergraduate students who need additional funding beyond what they can get from other sources. These loans require a credit check and have higher interest rates than other federal loans.
Direct Consolidation Loans: These are loans that allow you to combine multiple federal student loans into one loan with a single servicer and a single monthly payment.
The amount of federal student loans for online colleges that you can borrow depends on your level of study, dependency status, and aggregate loan limit. The current interest rates and loan fees for federal student loans can be found on the Federal Student Aid website.
Private Student Loans for Online Colleges
Private student loans are another option for online students who need additional funding beyond what they can get from federal sources. These loans are offered by banks, credit unions, online lenders, and other financial institutions.
Terms and Conditions of Private Student Loans
They have different terms and conditions than federal student loans, such as:
Interest rates: Private student loan interest rates can be fixed or variable, and they depend on your credit score, income, cosigner (if any), and other factors. Private student loan interest rates are usually higher than federal student loan interest rates.
Repayment options: Private student loan repayment options vary by lender, but they are usually less flexible than federal student loan repayment options. Some lenders may offer deferment or forbearance options in case of hardship, but others may not. Some lenders may also charge prepayment penalties or late fees.
Benefits: Private student loans do not offer the same benefits as federal student loans, such as forgiveness programs or income-driven plans. Some lenders may offer discounts or rewards for certain behaviors, such as making on-time payments or enrolling in automatic payments.
- Application process: Private student loan application processes vary by lender, but they usually require a credit check and proof of income. Some lenders may also require proof of enrollment or academic progress. You may also need a cosigner if you have a low credit score or no credit history.
A Guide to Private Student Loans for Online Education
To determine if your online school is eligible for private student loans, you need to check with individual lenders or use an online marketplace that compares multiple lenders simultaneously. You can also use the College Navigator tool to see if your online school has any preferred lenders or partnerships with private lenders.
If your online school is eligible for private student loans, you can apply directly with the lender or through an online platform. You will need to provide some personal and financial information, such as:
Name, address, phone number, email address, and social security number
School name, degree program, enrollment status, and expected graduation date
Income, expenses, assets, and liabilities
Your cosigner’s name and contact information (if applicable)
After you submit your application, the lender will review your credit history and income and determine your eligibility and interest rate. You will receive a loan offer that you can accept or reject. If you get the loan offer, you must sign a promissory note and complete any other required steps. The lender will then disburse the funds to your school account or directly to you.
Private student loans can help you cover the cost of your online education but also come with risks and responsibilities. Before applying for a private student loan, you should compare different lenders and loan options. You should also ensure you understand your loan’s terms and conditions and repayment obligations. It would help if you only borrow what you need and can afford to repay.
Takeaways
If you want to study online, you might wonder how to pay for it. Don’t worry; you can apply for student loans from online colleges. You must fill out the FAFSA form to apply for federal student loans. This will show you how much money you can get from the government and other sources of financial aid.
But what if federal student loans are not enough? You can also look for private student loans from banks or other lenders. Personal student loans have different terms and conditions than federal ones, so you must compare them carefully.
Look at each loan’s interest rates, repayment options, and benefits. You can use online marketplaces to find and compare private loan offers for online education.
We know paying for online education can be challenging, but we are here to help you. We will show you the benefits and opportunities of online education. Don’t let money stop you from pursuing your dreams. Sign up at EDU Blog today and discover how to finance your online education with student loans for online colleges.
