FAFSA and Financial Aid for Online College
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Online Colleges That Accept FAFSA
Many students need financial aid to help pay for school. Fortunately, online students have the same or similar level of access to financial aid as students enrolled in traditional programs.
A good starting point is checking if you're eligible for the Free Application for Federal Student Aid (FAFSA). FAFSA awards federal aid in the form of scholarships, grants, fellowships, and loans.
This guide provides information about applying for financial aid for online colleges.
How to Apply for Financial Aid for Online College
Applying for financial aid for online college is a multi-step process. Each program has its own rules, requirements, and deadlines for applicants, so it's best to research any program you're considering in more detail.
But, in general, this is how you apply for financial aid as an online student:
Complete the FAFSA
The FAFSA is the first step to getting federal financial aid as an online student. You'll fill in basic information about yourself and answer questions about your family's financial strength.
Your application will determine your eligibility for financial aid and how much you'll receive, so make sure you answer correctly. It's common for online colleges to require a completed FAFSA with a student's admission application.
To qualify for financial aid through the U.S. Department of Education (ED), students must be U.S. citizens or eligible noncitizens who can demonstrate financial need. Students should also make sure they enroll in online colleges that accept FAFSA.
You must maintain those basic eligibility requirements to keep receiving financial aid. You may also have to maintain a certain academic standard. Schools typically track things like GPA, credit minimums, and progress evaluations. Failing to meet these may disqualify you.
Recipients can also lose eligibility by transferring out of an eligible program; for example, a TEACH grant recipient switching to a non-education major would lose that funding.
The ED offers a few pathways for regaining eligibility, including reinstating citizenship, completing satisfactory progress evaluations, and getting out of default on current student loans.
To submit the FAFSA online, you'll need to create an FSA ID, an online account that stores your digital legal signature. Parents will also need to create an FSA ID; it's recommended that you do not create an account for someone else.
Next, you'll fill out the required information. You'll need the following to complete your FAFSA application:
- Social security number (and parent's social security number if you're a dependent)
- Driver's license number
- Federal income tax return
- Records of your untaxed income
- Records of your assets (money, such as savings and checking account balances)
- List of colleges you want to attend
The deadline for FAFSA 2022-23 is June 30, 2023. FAFSA opens on October 1 each year.
Remember that each state sets deadlines for FAFSA to determine state-based awards. Schools also have suggested priority deadlines, often serving the most financial aid on a first-come, first-serve basis.
In general, the earlier you submit, the better your chance of receiving financial aid becomes.
Students who submit the FAFSA online or through the myStudentAid mobile app can check their application status by creating an account. The application takes 3-5 days to process, plus one additional business day before they are accessible by schools. FAFSAs submitted by mail typically take 7-10 days to process.
Student Aid Report
After submitting their applications, each candidate receives a Student Aid Report (SAR) that summarizes the information they provided. Students can receive their SARs digitally or through the mail. Applicants must inspect the SAR for any mistakes and, if necessary, make corrections or updates online or by return mail.
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Review Your Award Letter
After the FAFSA is processed, a student's school issues an award letter with an offer of financial aid based on that information. Each recipient must review their award letter carefully to understand the types of available aid and select which awards they prefer.
While each student has unique aid options, most choose to accept scholarships and grants first. Most also accept federal student loans (which require repayment) only after allocating aid.
Award Letter Terminology
These award letters may use language you have not encountered before to describe your educational expenses and your level of financial aid eligibility. Here are a few terms you might encounter in your award letter:
- Cost of Attendance: COA refers to the amount it costs to attend college, including tuition, supplies, and living expenses.
- Expected Family Contribution: EFC is the estimated portion of COA that the FAFSA application has determined a student or their family can pay without financial aid assistance.
- Need-Based Aid: This is the amount of additional money a student needs to be able to attend college. Schools determine this number by subtracting a student's EFC from their school's COA.
- Non-Need-Based Aid: This refers to money a student is eligible for that is not based on financial need, but rather based on other factors, like merit. Colleges decide this amount by subtracting a student's need-based aid from the school's COA.
Degree-seekers may qualify for several federal student loans directly from the ED. The following types of federal loans are commonly awarded to on-campus and online learners:
- Direct Subsidized Loans: Undergraduate students with demonstrated financial need qualify for these loans. A school determines how much the recipient can borrow based on their FAFSA and overall financial aid eligibility. The direct subsidized loan may provide up to $5,500 per year, with fixed interest rates of 4.53% for its duration. The ED pays interest on the loan as long as the student remains enrolled at least part-time, for the first six months after graduation, and during loan deferment periods.
- Direct Unsubsidized Loans: This type of loan extends to undergraduate, graduate, and professional students and does not require proof of financial need. Recipients must pay the interest at all times, with variable rates for undergraduate (4.53%) and graduate/professional (6.08%) student borrowers. These loans may be awarded annually up to $20,500.
- Direct PLUS Loans: Parents or students at any degree level can receive Direct PLUS loans without demonstrating financial need. Borrowers must have a satisfactory credit history and pay a high interest rate (7.08%). Awards vary by school but may not exceed the total cost of attendance.
The ED offers many federal grants that do not require repayment for eligible students. Primary grant types are below.
- Federal Pell Grants: Undergraduate students with exceptional financial need may apply for a Pell Grant. Applicants may not have existing degrees, though some post-bachelor's teaching certification students may qualify. An applicant with a deceased parent who died in service in Iraq, Afghanistan, or in the line of duty in public safety may qualify for a higher award. These grants provide up to $6,895 per year for a maximum of 12 semesters.
- Federal Supplemental Educational Opportunity Grant: Undergraduate students with exceptional financial need who do not already hold bachelor's or graduate degrees may apply. Students who already receive Pell Grants have priority consideration. Participating schools set award amounts based on availability, providing recipients up to $4,000 per year.
- Teacher Education Assistance for College and Higher Education Grant: Bachelor's, post-bachelor's, or graduate students in high-need elementary or secondary school teaching fields can receive this grant. Each recipient must serve at least four years in a high-need teaching field with low-income students. The TEACH Grant awards up to $3,764 per year. For students who do not meet the teaching service requirements, the ED converts the grant to a Direct Unsubsidized Loan, which requires repayment.
- Iraq and Afghanistan Service Grant: Students whose parents died due to service in Iraq or Afghanistan after 9/11 may apply. Applicants must be younger than 24 or enrolled at least part-time at the time of their parent's death. Recipients do not require financial need and must be ineligible for Pell Grants. They can receive up to $5,829.50 annually.
Like grants, scholarships do not require repayment. Unlike grants, many scholarships do not require financial need and are instead awarded based on factors like merit, demographic, or intended major or program. For example, scholarships might target female, graduate-level, minority, or military students. Many schools, nonprofits, and private organizations offer scholarships.
While most traditional scholarships can be used for online programs, some award aid specifically for distance learners. A student seeking scholarships for online programs should ask their college's financial aid office or their high school counselor for assistance. Other resources for scholarships include federal and state agencies, the U.S. Department of Labor, and local businesses and community organizations.
Evaluating Your Letter
You'll receive a reward letter from the college(s) you applied for; you'll need to carefully review it before accepting any financial aid. If you listed more than one school, you should compare the award letters to see the most affordable option.
Be mindful of the details in each letter, as the terms and conditions are binding. When in doubt, contact your school's financial aid office for clarification. A student who experiences a catastrophic event or family hardship can appeal their award letter. Recipients' total awards may be negotiable, provided they submit a written appeal to their school's financial aid office.
Once a student knows the total financial aid package offered by their school, they should subtract the "free" financial aid (grants and scholarships) total from the COA. This determines the net COA. From there, students can consider accepting financial aid that requires repayment, such as loans, to make up the outstanding balance.
Apply for Additional Financial Aid
While required at most schools, the FAFSA is one of many paths to financial aid for online college attendees. Learners can also pursue private scholarships and grants, which do not require repayment.
A private grant is a financial aid offered by private foundations and organizations. You can qualify for private grants by meeting set criteria, which may vary.
Some private grants require applicants to demonstrate financial need, while others accommodate specific fields of study or demographic groups. Others emphasize academic achievement and scholarly research.
Organizations that support dynamic career and research fields — including STEM, information technology, and teacher education — commonly offer private grants. Students should seek as many private grants as possible to supplement their federal financial aid.
Students can begin their search for online college grants through the ED. Schools typically offer information about local or regional private grant opportunities through their financial aid offices.
Private scholarships are a form of financial aid that doesn't require repayment. It's recommended that you apply for as many as possible.
While some scholarships require candidates to demonstrate financial need, many are merit-based, making them more broadly accessible than grants. Other scholarships accommodate students who meet unique criteria, like belonging to a minority ethnic group, pursuing degrees in high-need service areas, or serving in the military.
Private scholarships come from various sources, including schools, employers, private companies, nonprofits, communities, and religious groups.
- Academic Scholarships
- Athletic Scholarships
- Military Scholarships
- Religious Scholarships
- Minority Scholarships
- African American and Black Student Scholarships
Where to Find Grants and Scholarships
Students can begin their search for online college grants and scholarships by asking their financial aid advisors for assistance. Applicants can also use searchable databases for grants and scholarships to do research. The following list includes several relevant resources for finding funding.
- Colleges and Universities: Candidates should start the funding search by contacting the financial aid offices of their prospective schools.
- Community Organizations: Organizations such as Kiwanis Children's Fund often have scholarship boards or databases, which include memorial and alumni scholarships.
- Private Organizations: Prominent international companies and nonprofits, like the Bill and Melinda Gates Foundation and the Coca-Cola Company, offer grants and scholarship opportunities.
- Scholarship Databases: Databases enable students to filter scholarships by location, major, or level of study.
- Employers:A student's employer (or their parent's employer) may offer unique scholarship opportunities for college students.
- U.S. Department of Labor: The DOL offers CareerOneStop, which features a free scholarship search tool.
- Religious Organizations: Some religious organizations, such as churches and synagogues, sponsor student members through scholarships.
You can apply for private loans if your financial aid can't cover all of your school costs.
Private loans come from various lenders, including banks, credit unions, and organizations like Sallie Mae, College Ave, and Navient. Unlike federal student loans, each lender sets its own terms.
Private loans come with riskier terms than federal student loans. Lending and borrowing conditions for federal loans are set by law, but private loans do not need to meet the same standards. Additionally, private loans usually do not offer the same benefits, such as income-based repayment plans and fixed interest rates.
Private loans are generally a last resort. Most students accumulate financial aid through scholarships and grants first, then pursue federal student loans before finally considering private loans.
Online Student Challenges with Financial Aid
Online students may encounter challenges while applying for financial aid. Some schools may restrict eligibility for distance programs. Your school's accreditation is also important.
Some schools limit access to financial aid for online students. You may not be eligible if you're part-time or don't live on campus; financial aid sometimes requires full-time and on-campus enrollment.
Online students must attend accredited online schools to qualify for federal financial aid. Accreditation ensures that a school meets national standards for higher education.
Schools can pursue either national or regional accreditation. Both are granted through agencies recognized by the ED and the Council for Higher Education Accreditation. Regional accreditation is more rigorous and, therefore, more prestigious than national accreditation.
In addition to providing a high-quality college education, only accredited schools may participate in federal financial aid programs based on FAFSA eligibility.
Frequently Asked Financial Aid Questions
Can You Still Get Financial Aid for Online Classes?
Yes. You can get financial aid if you take online classes. Online students can use FAFSA and apply for scholarships and grants. But, online students do not always qualify for aid. Some schools require students to enroll full-time or in specific majors.
What Online Classes Qualify for Financial Aid?
Most schools offer financial aid for online classes, the same as on-campus programs, regardless of a student's major or level of study. However, undergraduate students receive more financial aid than graduate students, who are often considered and thus ineligible for as many awards.
Is Financial Aid Available for Online College Students?
Online college students can apply for most of the same financial aid as students on campus. FAFSA, scholarships, grants, fellowships, and loans from private lenders are available. Keep in mind the ED only allows accredited schools to participate in federal financial aid programs, so be sure your school is accredited.
Does FAFSA Cover Online Certificate Programs?
Yes. You can sometimes pay for online certificates with federal financial aid. But not always.
There are two common types of certificate programs: career training and graduate. Most career training programs in fields like healthcare, education, or computer technology are FAFSA-eligible.
But online graduate certificate programs are less likely to offer financial aid. Graduate certificates are not eligible for FAFSA; aid availability then depends on the school or program.
What Online College Gives the Most Financial Aid?
Online colleges award varying amounts of financial aid, typically based on available funding and which students demonstrate the highest need. Some schools even implement "no loans" policies that provide high-quality financial aid packages for online college students. However, the actual award amount varies by student.
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Other Money-Saving Tips
Online students can save money in other ways besides financial aid. Here are a few tips to help you save.
Create a Budget
Budgeting is critical for financial fitness, both in college and beyond. Students should create plans for repaying student loans, such as setting monthly payments on a calendar or spreadsheet. They should also account for expenses like food and entertainment while completing their degrees.
Take Advantage of Student Discounts
Financial aid for online college enrollees often includes embedded discounts, such as fixed, frozen, or in-state rates for all distance programs.
Consider a Tuition Payment Plan
Many tuition payment plans enable students to pay in monthly or biannual increments. Some payment plans require a one-time enrollment fee, but most do not add interest to payments.
Make Sure Your Credits Will Transfer
Students should confirm their school's transfer policy, as some colleges accept only credits from regionally accredited institutions. Transferring credits for academic, professional, or military experience can lead to lower tuition costs and faster completion times.
Rent or Buy Used Textbooks
Many schools provide programs for students to rent or buy textbooks instead of buying them new. Distance programs increasingly offer all-virtual textbooks for online learners.
Ask Employers About Tuition Assistance
Some employers assist students who commit to working within their organization after graduation. Others sponsor candidates who plan to serve their local communities.
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