Navigating the student loan process with an online degree

Whether you want to earn a degree while working full-time, study from the comfort of your home, or enroll in a distant college without having to travel, one thing is undeniable: online degrees have opened up a whole world of opportunity. But what options do you have when it comes to financing your studies? Do you have student loans available?

Finally, online degrees cost an average of $51,091, despite being cheaper than on-campus courses. Fortunately, the short answer is yes, there are student loans to fund your distance learning. But there’s a little more to consider – start here!

Federal student loans for online degrees

Tuition fees are a necessary evil to gain access to your desired online degree and boost your career. Luckily, thanks to the rise in popularity of online and distance learning, you’ll find that applying for a student loan for an online degree isn’t much different today than getting financial aid for a campus class. And it all starts on the FAFSA website.

FAFSA — or Free Application for Federal Student Aid — is a program designed to help institutions understand how much a student can contribute toward college tuition and how much financial aid is needed based on their household income.

Today, most accredited online colleges accept this form of need-based help, and there are no income requirements that you must meet in order to apply. The following should be noted when applying for a Federal Student Loan:

There are different types of loans available depending on your circumstances, including direct subsidized or unsubsidized loans, direct PLUS loans and direct consolidation loans.
Your school, the state, and the federal financial aid program may have different deadlines for submitting your application, so be aware of any timing differences.
Every year, the FAFSA sets Limits on the amount that can be borrowed and the aid provided may not cover 100% of your tuition or expenses.

Private student loans for distance learning

Private student loans are a good alternative to government funding programs. But they can also help you fill financial gaps created by federal loans by funding 100% of your remaining amount needed.

Personal loans are provided by independent institutions such as banks and private lenders and come with a few benefits worth considering.

First, these loans are tailored to your specific financial situation, are accepted by a wider range of accredited online institutions, and come with higher credit limits.

Additionally, if you or your co-signer have an excellent credit history, you may be able to secure low interest rates. For example, federal student loans in 2022 come with interest rates ranging from 3.73% for undergraduates to 5.28% for graduates, while interest rates on private loans can be as high as 3.34% for the same year.

What you need to know before applying

While private student loans can be extremely useful to fund your online studies, there are some important differences to be aware of:

Applying students usually need a co-signer unless they are employed full-time, and the co-signer’s creditworthiness affects the amount and installments of the loan
credit based: Unlike government student loans, private student loans are credit-based rather than need-based
Independent Lenders may require various documents including proof of citizenship and information about the college.
Private Loans can fund whatever amount you still need to access your desired online degree and fund tuition, educational expenses, and related fees.

Other options for funding your online degree

As more degrees are adapted to distance learning programs, more options are available to help you fund your online studies. Undoubtedly, applying for a federal or personal loan is the simplest solution, but there are other alternatives worth considering.
Employer Funding

Today, only 10% of eligible employees use their employer’s tuition reimbursement program. However, these programs can help you fund your online degree while also pursuing a career in your current workplace. Check with your employer about available options and eligible courses.

payment plans

Not all online universities and colleges accept student loans – but the majority of accredited institutions make payment plans available to their prospective students. While paying the entire tuition fee up front can get you a small discount, payment plans can help you fund your studies on your own if a loan isn’t available.

grants and grants

Distance students have the same rights regarding grants and scholarships as on-campus students. Check with your accredited online university for available cash rewards.

time to sign up

While not all online colleges and universities accept student loans yet, the number of institutions opening up to this option is increasing – and so are your opportunities to complete your degree online! Contact your college to find out more about your available funding options.

Featured image: Andrea Piacquadio, Pexels.

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