Financing Your Online Education
The good news is that the financial aid application process for an online degree is the same as that of a tradition college. That wasn't always the case though.
In the early days of distance learning, when bogus colleges attempted to gain access to federal financial aid, the U.S. Department of Education enacted the 12-hour rule, and Congress passed a companion law, the 50-percent rule. These two rules stated that in order to receive federal aid, schools had to deliver 12 hours of course work weekly, and that no more than 50 percent of students enrolled in an institution could be distance learners.
Unfortunately, as more people turned to online colleges for reasons such as flexibility and convenience, the laws prevented them from getting aid. In addition, for colleges that provide both online and on-ground courses the rules imposed a limit on the number of students they could enroll. Eventually the rules were relaxed, giving students equal access to aid and schools access to online students.
Now you'll find that the same sources of aid exist for students, whether they're taking classes on campus or behind a computer. Let's review some of the different types of aid you may apply for and -- cross your fingers -- receive.
- Grants are a gift. As such, they don't have to be repaid, unless, for example, you withdraw from school and owe a refund. Grants often are awarded according to financial need, and students must maintain a minimum grade point average (GPA) to continue qualifying.
- Loans allow you to borrow money for your education. Students may apply for a loan through the Free Application for Federal Student Aid or FAFSA, their college financial aid office or a local bank. Government loans require that you pay back the principal and that the government pays the interest. Private loans come from banks and generally have a higher interest rate.
- Scholarships are awarded to students for a variety of reasons. They're often based on past academic performance, leadership, or ability in sports or the arts. Private scholarships also are given by businesses and organizations to students who show promise. Like grants, scholarships don't have to be repaid; however, some require students to maintain a minimum GPA or potentially commit to a team.
- Work-study programs allow students to earn money to pay for their education while attending school.
Next, we'll tell you how to get your application for financial aid rolling.