The online college has several benefits like lower tuition costs and flexible schedules. But do the traditional college rules apply in terms of funding and financial aid? Well, that depends. Sometimes the regular rules apply; sometimes, it doesn’t.
But one thing is for sure: if you want student loans to fund your online education, you can get it. Now, whether you can get your loans through the federal government or a private lender depends on the school you enroll in.
This guide will show you how to acquire a student loan for your online college. Let’s begin.
Determine If Your School Qualifies For Federal Loans
If you’re wondering whether to go for federal or private student loans, it’s generally a good idea to start with federal student loans. That’s because these loans come with several borrower benefits and protection.
For example, you can get student loan forgiveness programs, deferment and forbearance options, and income-driven repayment.
However, remember that the U.S. Education Department must accredit the online college to qualify for federal student loans. The good news is that there are numerous accredited online colleges ready to set you up with financial aid and federal student loans.
- Fill Out The FAFSA Form
The first step to acquiring student loans for your online college is to complete the Free Application for Federal Student Aid (FAFSA). This application helps determine whether you qualify for federal student aid, including grants and federal student loans.
Here are the following steps to complete the FAFSA:
- Create an FSA ID
If you want to apply for the FAFSA online, you need to create a Federal Student Aid (FSA) ID at StudentAid.Gov. In addition, if you’re a dependent student, your parents will have to create an FSA ID. That way, they can sign your application.
Remember that you’ll need your social security number to sign up for an FSA ID.
- Get Your Documents
You’ll need your recent tax return, financial information, and any documentation regarding any assets to apply for the FAFSA. You’ll need this information from your parents if you’re a dependent student.
If you filed a tax return, there’s a high chance you can transfer it to your FAFSA directly if you use the IRS Data Retrieval Tool. The tool is linked with the FAFSA directly.
- Fill Out The FAFSA
The next step is to fill out the FAFSA form using your tax and financial information. Also, you’ll need at least one school that will receive your FAFSA information. You can submit the form after you’re done.
- Get The Financial Award Letter
When you complete the FAFSA application, you’ll receive a financial aid award letter from your college. The letter will detail the federal student loans and grants you’re eligible for. From there, you can choose which one to accept.
- Apply For Grants And Scholarships
You don’t have to pay back when you apply for scholarships and grants, unlike student loans. And that makes it a great way to pay for college. Also, there’s no limit to how many grants and scholarships you can get.
Some organizations that offer grants and scholarships for online courses are:
- National and local businesses
- Non-profit organizations
- Professional associations in your specific field
You can use sites like scholarships.com, Fastweb, etc., to search for scholarships.
- Take Out Your Federal Loans
After you apply for the FAFSA and receive your financial aid award letter, you can decide what federal student loans and financial aid to accept. Remember, if you opt for federal student loans, it’s usually best, to begin with, Direct Subsidized Loans.
These loans are available to undergraduate students with financial needs. If you’ve reached your limit or don’t qualify for the loan, the next best choice is the Direct Unsubsidized Loans.
Even though the government doesn’t cover the interest on these student loans, they come with lower rates than Direct PLUS Loans.
When you complete your education, you can pay back your loans using loan forgiveness programs like Public Service Loan Forgiveness.
If you exhaust your federal student loan options, Private loans can help you cover any funding gaps left. But that should be your last resort, so check if you can qualify for scholarships and grants before you proceed with private student loans.
So compare interest rates before you choose. If you have good credit, you might get a lower interest rate. That said, you should always only borrow what you need. Since you’ll be taking your classes online, you won’t need much compared to a regular student.
So always take a loan you can repay without much difficulty.