The cost of getting a college education is continuing to rise. In 2024, the average cost of college reached $38,000 per year. With these costs and the interest charges associated with student loans, the costs of getting a bachelor’s degree can add up quickly. This is one of the reasons why more and more people are considering online college degrees.
Whether you are graduating school or want to return to education to improve your career prospects, an online college degree can be a more affordable option. However, there are still financial aid options available that can assist you with the costs of online college.
The Types of Financial Aid For Online College Degrees
While online learning can be significantly cheaper, potentially saving tens of thousands of dollars, it is far from free. This means that unless you have unlimited savings, you are going to require some form of financial aid to support your continued education.
Fortunately, there are a number of ways to find the money to pay for your schooling with financial aid that applies to online colleges. These forms of funding are not limited to the options for traditional students or those attending in person classes, and can be a handy way to offset the costs of your education.
| Feature | Grants | Scholarships | Loans |
|---|---|---|---|
| Definition | Financial aid that does not need to be repaid, typically based on financial need. | Financial aid that does not need to be repaid, usually based on merit, talent, or specific criteria. | Borrowed money that must be repaid with interest. |
| Eligibility | Based on financial need, sometimes specific criteria like demographics or field of study. | Based on academic achievement, athletic ability, artistic talent, or other specific criteria. | Based on credit history (private loans) or financial need (federal loans). |
| Repayment Required? | No | No | Yes, with interest. |
| Application Process | FAFSA (Free Application for Federal Student Aid) or institutional applications. | Varies by provider; may require essays, applications, or interviews. | FAFSA for federal loans; credit check for private loans. |
| Common Sources | Federal and state governments, colleges, nonprofits. | Colleges, private organizations, corporations, and foundations. | Federal government, banks, private lenders. |
| Amount Awarded | Varies, typically based on financial need. | Varies, can range from small amounts to full tuition coverage. | Varies, with limits based on school costs and creditworthiness. |
| Interest? | No | No | Yes, with varying rates depending on loan type. |
| Impact on Financial Aid? | May reduce need-based aid eligibility. | May reduce need-based aid eligibility. | Increases student debt and must be repaid. |
| Best For | Students with financial need. | High-achieving or qualifying students with specific talents or backgrounds. | Students who need additional funding to cover tuition and expenses. |
FAFSA
The first step in exploring your financial aid options is to complete the Federal Application for Student Assistance or FAFSA form. This is available on the StudentAid.gov website. Essentially, this form acts as the basis for what aid and how much aid is available to you. This includes federal loans and grants along with state and institution financing. All of these bodies use the FAFSA application to determine student eligibility.
As an online student, you will also need to consider whether an online college accepts FAFSA. Fortunately, most accredited schools and colleges accept aid via FAFSA. The best way to find out if your potential program or online college accepts FAFSA aid is to visit the school’s website and look for a “financial aid” link. This should confirm whether the program accepts aid. However, some schools do not have a direct listing on their page, so you would need to reach out to the school to speak to a representative about what aid can be provided with FAFSA applications.
Grants
One of the best funding options for online college degrees is a grant. These financial awards do not require repayment, so you don’t need to worry about budgeting the cost into your expenses. There are several grant options, but there are some popular ones to look at.
Pell Grants
To qualify for a Pell Grant, applicants must submit a FAFSA and demonstrate sufficient financial need. However, Pell grants can cover your tuition, books or other college expenses. You will need to submit a new FAFSA each year to continue to receive Pell Grant funds, but you can receive up to 12 terms of payments. After the 12 terms, even if you have not completed your degree, you will receive no further funds.
The amount of the Pell grant changes each year, but there is a maximum award cap. The specific amount you could receive would be based on whether you’re studying full or part time, attending the full academic year, the cost of attending the program and your Student Aid Index. The latter is calculated using the information you provide on your FAFSA form. You can also receive additional funds if you have a parent who was an active serving US armed forces or public safety officer killed on duty.
The Federal Supplemental Educational Opportunity Grant
FSEOG is a program directly administered by financial aid offices in participating schools to students with exceptional financial need. The amount recipients get depends on financial need, whether you receive other aid and the available funds at your school.
Participating schools receive funds from the Federal Student Aid Office and they allocate funds to qualified applicants. However, once all the funds have been awarded, no further grants will be approved during the year, even if the applicant qualifies for aid. This makes it important to apply as soon as possible. Each school determines its own program deadlines, so it is worth checking with the school administration or financial aid office.
State, Community and Private Company Grants
This is a little broad in scope, but each organization may offer grants for specific fields of study, with different award sizes. You can explore many of the grant options on the StudentAid.gov website or by speaking to the financial aid office at your school.
Education Grants
Colleges and universities can also award grants. These tend to be targeted towards helping the institution achieve specific goals. The amount of the grant may vary, but if you’re interested in a particular field or are part of a minority demographic, you could qualify.
Scholarships
Scholarships are a highly sought after form of funding for a college education. As with grants, you don’t typically need to repay a scholarship. Scholarships are typically awarded for achievements and in addition to providing financial assistance for your studies, they can also benefit you in the future. After receiving a scholarship, your name would be attached to the scholarship program, which means you will continue to be associated with a certain achievement level.
If you’re interested in scholarships for your online college degree, you will need to double check that the scholarship funds can be used for online programs. Scholarships are available in various sizes and formats, but some are very generous and can cover much of the cost for your online degree. However, some scholarships may offer a limited amount that will only cover part of the cost. Scholarships can be useful to help offset educational debt, regardless of the amount you receive.
Each scholarship program has its own application process, but generally, you will need to submit an application and demonstrate how you fit the requirements of the scholarship. Some programs have additional requirements, such as maintaining a specific GPA, participating in extracurriculars, membership of a particular community organization or submitting a personal essay.
There are even some scholarships that can be used specifically for online programs.
Distance Learning Scholarship
This scholarship is part of GetEducated.com and it is specifically for those studying online college degrees. It is awarded on both merit and financial need and the application requires an essay submission and you must complete a FAFSA form.
Society for Human Resource Management
This organization offers scholarships for students interested in a career in resource management. You can submit an application through the website.
Nitro Scholarship Sweepstakes
This is a scholarship awarded throughout the year to college students and high school seniors. Both students and parents can apply and the award amount is up to $2,000.
Leopold Education Project Scholarship
This scholarship program offers varying amounts to students in a field relating to natural resources. You must have a high school diploma or GED and plan on enrolling full time at an accredited college.
Finding a scholarship does require research to find the options best suited to your circumstances. A good starting point is to think about your past activities, educational strengths, goals and interests. This will help guide your search to potentially find a scholarship that is well fitting for your requirements and circumstances.
For example, there are a number of online scholarships for underrepresented and women students. The goal of these programs is to provide access to higher education to those who may encounter more barriers.
There are also school specific scholarships for online college. Most universities and colleges have a budget to provide financial aid for those who qualify with a combination of achievement and financial need. These funds are designed to encourage and assist students to enroll in their program. If you already have an online school in mind, it is worth checking if there is a scholarship program that could apply to your circumstances.
State Aid
Many states have both grants and loans available to students that are in addition to any awards received from the federal government. Each state has its own funds and a process to distribute aid. Depending on your location and the location of your school, this could offer a source of funding for your education.
Some states only require you to complete a FAFSA form, but you may need to reach out directly, via your state’s website.
Employee Assistance Programs
If you’re returning to education, you may find an employee assistance program that could help to pay for your online school. These types of programs offer help with tuition costs for employees wanting to return to school. If you’re working, even if it is only part time, it may be worth inquiring.
There are education benefits for both employers and employees. Employers can offer up to $5,250 per year for education and it is not considered part of the employee’s taxable income. The employer can also deduct this cost as a business expense. So, if you let your employer know you want to attend school, they may be willing to assist you financially and with increased flexibility in your work schedule.
Work Study Programs
It can be more challenging for those returning to education, but federal work study programs can offer options to pay for your education. Traditionally, these programs require on campus attendance, but some online programs do have remote positions for work study students. To learn more, you will need to contact your school’s financial aid office.
Student Loans
Student loans are a specialized form of financing to cover educational expenses. Like any loan, you need to repay your student loan and it will incur interest charges. However, typically, you are not required to start making payments on your loan until you’ve finished your college program.
You can access student loans from financial institutions, but there are also two main forms of federal student loan. Subsidized student loans are needs based, but the interest only accumulates when you begin repayment. Until you start to make payments, the government pays the interest charges. This is typically until graduation or six months after you graduate. There may also be a period of deferment.
Unsubsidized federal student loans are available to both graduate and undergraduate students, regardless of their financial need. The key difference between this type of loan and subsidized loans is that interest begins to accrue on an unsubsidized loan as soon as the funds are dispersed. So, if you take out an unsubsidized student loan in your freshman year, it will continue to accrue interest until you graduate and beyond. This means that the total balance of the loan can be far more than you initially borrowed. Some people try to offset this by making interest payments while they are attending school, but you are only obliged to start repayments six months after you graduate.
Both types of loan can be repaid with a standard ten year repayment plan or the repayment plan can be income based.
There are several factors that influence your student loan terms including the amount you borrow, the repayment period and if you have a variable or fixed rate. To apply for a federal student loan, you will need to submit a FAFSA form. The loan will then be offered based on the information you’ve supplied. On the other hand, you can approach financial institutions for a private student loan. You will need to submit an application and the lender will assess your credit and circumstances to make an approval decision.
Student loans must be repaid, but there are some circumstances when the debt may be forgiven or have forbearance. For example, during the pandemic in 2020, student loan holders could apply to cease payments and there was a period of 0% interest due to the uncertainty in the economy and the pandemic limiting the ability of many people to work and earn an income.
However, many of the provisions for loan repayment relief only apply to federal student loans. Private student loans tend to be more costly with higher interest rates and fees, but they can be useful if you don’t qualify for a federal loan.
Funding Your Online College Degree
In most circumstances, if you need assistance to fund the costs of your online college degree, you may need to employ a variety of funding options. Many students combine student loans with grants and scholarships to cover the full cost as many grants and scholarship programs do not provide sufficient funds to cover all expenses.
However, if you are able to obtain a grant or scholarship, you won’t need to repay these funds, which means that you will have a lower student debt burden in the future.
Your first step to discover your funding options is to do some research. If your school participates in the federal student aid program, you can start the process by submitting a FAFSA form. This will correspond to the school year you plan on seeking aid for. So, if you want financial aid for the 2025/2026 school year, you should complete the 2025-2026 FAFSA form. If you’re planning on taking summer classes, you will need to check with the financial aid office at your school to determine which form you should complete.
The form is quite in depth and takes approximately one hour to complete. You will need to provide personal, financial and other data. If you’re a dependent student, there are also sections for your parent or guardian to complete. All of this information is used to calculate your Student Aid Index, which will determine your eligibility for federal grants, scholarships and loan programs. You can use a Federal Student Aid Estimator to get an approximate idea of your eligibility before you complete the FAFSA form. This will give you a good idea of whether you can qualify for federal student aid.
Don’t forget that you can also explore state, local and private funding options. Check out the resources on your home state’s website and research if there are local groups or organizations that align with your circumstances or field of study which offer financial aid for students.
If you’re currently employed and returning to education, there are also a number of options that can assist you with your education costs. For example, the work study program at your school or employee assistance could provide help with the costs of your tuition, books and other expenses.
Online college degrees are a more affordable way to improve your qualifications, but you need not bear the full cost yourself. There are so many different forms of financial aid that it is well worth taking some time to explore your options before you continue your education journey.
