3 Sources of Financial Aid for Online Degrees

The flexibility and convenience of earning a degree online has resulted in more and more students enrolling in online degree programs. Like students on a campus, online students have to finance their educations. In most cases, online students are able to use the same programs available to on campus students in order to pay tuition costs. To take advantage of available options for financial aid, students should be sure to enroll in an institution and online program that is accredited by an organization recognized by the United States Department of Education. The next step is to file a Free Application for Federal Student Aid (FAFSA) as early as possible and discuss loan, scholarship and grant, and work study options available at a school with a financial aid counselor.

Federal Loans

Private loans are an option for most students, whether on campus or completing a degree online. Federal school loans, however, have many benefits, including a lower interest rate than traditional private loans and options for deferment while in school and forbearance for economic hardships.

There are several types of available federal student loans that online students at accredited universities and colleges are eligible for. The two most common are the federal subsidized Stafford loans and federal unsubsidized Stafford loans. An unsubsidized loan begins accumulating interest right away, while the government pays the interest while a student is in school, plus six months after graduation with a subsidized loan.

Other types of common federal loans are the Perkins and PLUS. The federal Perkins loan is available for students who meet exceptional financial need requirements, and the federal PLUS loans are designed for parents of students and graduate or professional degree students. PLUS loans require a credit check and often a co-signer.

Scholarships and Grants

Scholarships may be given by the university or college, a state or other government agency, private or non-profit organizations, or other interested groups. Scholarships can be awarded in several different categories, including academic achievement, ethnicity or gender, new high school graduates, and more.

Grants are similar to scholarships; they are given to students based on the criteria of the issuing organization. Some grants are available from institutions or private organizations, but many grants are issued through state and federal departments. Grants typically do not require repayment, although some conditions for enrollment status and academic progress are typical.

Federal Work Study

The Federal Work Study (FWS) program is another possibility for receiving financial assistance with paying for school, and accredited schools that participate in the program allocate these funds to online students depending on the institution.

The U.S. Department of Education allocates some funding each year for participating schools to offer students employment at the school of attendance, a public agency, or a non-profit or private organization. Because at least 7 percent of the FWS funds must be used for community service jobs and employment outside of the school can fulfill the requirements, online students who attend participating universities are eligible for this type of financial aid by finding suitable work programs in their local communities.

For more information on the Federal Work Study program, visit http://www2.ed.gov/programs/fws/index.html.