Ways to Pay for Your Online Education

By Brandon Swenson November 12, 2020

Every parent wants the best possible future for their child, but financial obstacles can seem impossible to overcome. However, even with rising tuition rates, cost does not have to be a limiting factor to education. There are a number of scholarships, grants and loans available to assist families and students in paying for both online and in-person college courses. The National Center for Education Statistics reports that during the 2009-2010 school year, financial aid was awarded to 82% of students attending public four-year colleges and 89% of students attending private four-year colleges. Many online colleges offer the same financial aid packages as in-person institutions, and there is no difference in the aid awarded to students based on which type of education they pursue.

You Don’t Have to Go into Debt for Online College

Scholarships and grants are two forms of financial aid that do not need to be repaid. In addition to those provided by specific institutions, scholarship opportunities are also offered by federal, state and local governments, professional associations, companies and non-profit organizations. Scholarships can be awarded on a variety of levels, including academic performance, artistic talent, athletic abilities, cultural background and economic status. To find a scholarship appropriate for you, you can search by intended major, program or student interest group.

Grants come in two forms: need-based and merit-based. Need-based grants are usually provided by the federal government and include partial or full tuition coverage determined by financial need. To see if you qualify for need-based grants, fill out and submit the Free Application for Federal Student Aid (FAFSA). This will take into consideration your family’s expected financial contribution (EFC). Your EFC will be subtracted from the total tuition cost to determine your financial need. More information on this process is detailed below. Merit-based grants are based on specific qualifications and are awarded to students who demonstrate exceptional motivation, passion, leadership ability or achievement in a variety of areas, including art, athletics and academics.

Grants can be provided by the federal government, state government, private institutions, academic departments and corporations. Among federal grants, the Pell Grant is a tremendous source of funding for many college studies and is awarded to undergraduate students based on financial need. This grant is given to undergraduate students pursuing their first college degree and can pay up to $5,500 yearly.

Students who receive the Pell Grant are also eligible for three other grants: the Supplemental Educational Opportunity Grant, which is based on exceptional financial need and can provide up to $4,000 every year; the Academic Competitiveness Grant, awarded to students with financial need who engaged in rigorous academic study throughout high school; and the Science and Mathematics Access to Retain Talent Grant (SMART), which pays up to $4,000 to students majoring in the science, engineering, mathematics or technology fields. Students who plan to teach elementary or secondary school students may apply for the Teacher Education Assistance for College and Higher Education (TEACH) Grant. This awards up to $4,000 yearly in exchange for an agreement to teach students in low-income areas for a minimum of four academic years.

In addition to federal grants, there are also state and private grants. Different states offer merit-based educational grants, so check your state’s official website to determine which ones you are eligible for. To find private grants for your online college, conduct a web search based on your personal characteristics, including race, gender or religious affiliation. Also, look for professional organizations associated with the career path you plan to pursue and groups that share your hobbies or interests.

Federal Student Loans

Just like in-person college programs, most online courses qualify for federal student loans. This type of financial aid offers numerous benefits, such as income-based repayment plans, loan forgiveness programs and options for deferment or forbearance in the event of financial hardship. To determine if you are eligible for federal student loans, you must first check the Database of Accredited Postsecondary Institutions and Programs to make sure your online college has been accredited by the U.S. Department of Education. After accreditation has been established, check to make sure you meet following criteria: a high school diploma or equivalent, U.S. citizenship, a valid Social Security number and enrollment in an eligible degree program.

If you meet the above requirements, the next step is to complete and submit the FAFSA, an online application that will demonstrate your level of financial need and which federal grants and loans you are eligible for. To continue receiving aid throughout your college career, you must maintain an adequate GPA based on your college’s specific demands and satisfy all of the course requirements for your program of study. You must fill out the FAFSA every year.

There are four federal loans you may be eligible for: Federal Perkins Loans, Federal Direct Subsidized Loans, Federal Direct Unsubsidized Loans and the Federal Parent PLUS Loan. Federal Perkins Loans are low-interest, fixed-rate loans that allow up to 10 years for repayment. If you work in the education, military, or healthcare fields, or with a volunteer organization such as the PeaceCorps, you may be entitled to partial or even full loan forgiveness. Federal Direct Loans have fixed interest rates, require repayment six months after graduation and come in two forms. Direct subsidized loans are based on financial need, and borrowers do not have to pay interest while they are still enrolled in college. Direct unsubsidized loans are not based on financial need, so interest starts to accrue immediately and borrowers must pay interest for the length of the loan. Federal Parent PLUS Loans allow parents of students to borrow funds for education, with interest rates based on the credit history of the borrower.

Private Educational Loans

If you have accepted the federal student loans available to you and are still struggling with paying for your online education, the next step is to look into private educational loans. Private lenders, including banks, credit unions and private foundations, offer loans with higher interest rates and often charge fees. Conduct comprehensive research before taking out any private loans, and only borrow as much as you need. Compare offers from various lenders, including smaller community banks, as well as the top-ranked private loan companies. It is important to review the reputation of the lenders, familiarize yourself with loan costs and borrower benefits, and consider the Annual Percentage Rate (APR). Private loans do not offer the same options for reducing or postponing payments that federal loans do, so make sure you will be able to afford your payments after graduation.

Paying for college may seem intimidating, but most students have a variety of options to help cover costs. From scholarships and grants to federal and private loans, the financial resources you need to enroll in classes are available in a variety of forms. Plus, compared to traditional on-campus education, choosing an online degree program can be even more accessible and cost-effective. As an online student, your living expenses and transportation needs will remain the same and flexible scheduling means you can retain employment while pursuing your degree.

Ready to start your college career at one of the first online universities? Learn more about ways to pay for a Grantham education and reach out to an admissions expert today.