Our goal here at Credible Operations, Inc., NMLS number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are ours.
Online schools are an attractive option for many people seeking a degree. Attending an online school is generally cheaper than attending a school on campus.
Still, they’re a big expense – the total cost of an online bachelor’s degree can exceed $ 60,000, according to US News.
If you’ve exhausted your financial aid options, you might be wondering if you can get a student loan to continue your education online. The good news: yes, it is entirely possible. But it is useful to understand how different types of student loans work so that you can choose the one that best suits your situation.
Here’s what you need to know to get a student loan for an online school.
Can I get a student loan for an online school?
Usually yes, as long as you, your school, and your study program meet all applicable eligibility requirements.
Whether you are applying for federal loans or grants, or considering private student loans, the first step is the same: complete the Free application for federal student aid (FAFSA). Remember that help is limited, so check FAFSA deadlines and submit your application on time. Your school’s financial aid office will determine how much aid you are eligible for.
If you need apply for a loan, exhaust your federal student loan options before you turn to private student loans to fill any funding gaps. Federal student loans offer benefits that private student loans cannot, including more protections, and they generally carry lower interest rates.
You can compare the rates of several student lenders using Credible.
How to get student loans for online degrees
If you still need to borrow money after getting grants and scholarships, here’s how to get a student loan for your online school.
1. Confirm that your school is accredited
Your online school must be accredited by an organization recognized by the federal government to be eligible for federal financial aid.
The Ministry of Education Federal Schools Code Online Finder allows you to search by school code to find the accreditation status of any school online. To find your school code, search for “federal school code + your school name”.
2. Confirm that your study program is accredited
The Higher Education Accreditation Council facilitates research in databases and directories of accredited institutions at local, national and global level. You can search its robust databases of 8,200 schools and 44,000 programs to confirm if your school and course is accredited.
3. Fill out the FAFSA
The information you submit with your FAFSA application is what helps schools calculate your financial needs. This figure is determined by subtracting the expected financial contribution of your family from the estimated cost of attending your school.
Submit your application by the deadline – the sooner the better. You wouldn’t want to receive less help than you might be entitled to just because you missed the deadline.
The FAFSA deadline for the 2021-2022 academic year is June 30, 2022 at 11:59 p.m. Central Time.
4. Apply for a federal student loan first.
If you need to borrow money to pay for your school online, you should use Federal Student Loans rather than Private Loans as they offer more benefits, such as …
5. Private student loan comparator
Often, federal financial assistance does not get you far. If the federal support you receive is not enough to cover tuition costs, you may need to take out a private loan to fill the gaps.
A general rule of personal finances is that you don’t want to pay a dime more than you need to. Be sure to compare several private student lenders to find a loan with a low interest rate, loan fees, repayment options, and eligibility requirements.
Comparison of purchases for private student loan rate is easy when using Credible.
Federal student loans for online schools: what you need to know
The federal loan program offers four types of federal student loans. Eligibility, loan limits, and loan terms vary based on factors such as your grade level, dependent status, and tuition fees. Let’s look at the four different types of federal student loans.
Subsidized direct loans
With a subsidized loan, the federal government covers the interest if you are enrolled in school at least part-time, during your six-month grace period after you leave school, and during deferred payment periods.
Who is eligible: Undergraduate students with financial need, based on their FAFSA application
Loan limits: Aggregate limit of $ 23,000 for subsidized and unsubsidized loans
Loan conditions : 10 to 25 years
Direct unsubsidized loans
Direct unsubsidized loans are almost identical to direct subsidized loans with one key difference: your eligibility does not depend on your financial needs.
Who is eligible: Most undergraduate and graduate students can be eligible as long as they maintain at least half-time enrollment
Loan limits: $ 31,000 to $ 57,000 (the amount you are eligible for depends on your dependent status)
Loan conditions : 10 to 25 years
Direct PLUS loans
If you reach your maximum borrowing limit with both subsidized and unsubsidized loans, you may still need additional resources to pay for your online degree program. This is where Direct PLUS loans come in.
Who is eligible: These loans are provided to qualified graduate or professional students (Grad PLUS loan) or parents of dependent undergraduates (Parent PLUS loan). To qualify for Direct PLUS loans, you will need a strong credit history or a co-signer with good credit.
Loan limits: The maximum loan limit PLUS is the difference between the cost of attendance and your financial aid
Loan conditions : Up to 30 years
Direct consolidation loans
As the name suggests, a direct consolidation loan allows you to consolidate all of your federal education loans into one loan, with a new interest rate equal to the weighted average of the interest rates of your old loans. . Along with the convenience of making just one monthly payment instead of several, your payment would likely be lower than the combined costs of your previous loans.
Who is eligible: People who graduated, dropped out of school, or fell short of part-time enrollment; consolidated loans must be in repayment or deferred
Loan limits: No limit set
Loan conditions : Up to 30 years
Private student loans for online schools: what you need to know
If your federal help isn’t enough to cover your tuition and online expenses, consider private student loans to pay for your education online. It is common to use a mix of federal and private student loans while you are studying online.
Private student loans for online schools work the same as if you attended in person. As with other types of loans, each lender has their own eligibility requirements, loan limits, and conditions. Compare the terms and criteria of each lender to find the best private student loan for you.
Before applying, confirm that the lender is working with your school, as many lenders are selective in choosing partner schools.
How to find a private student loan
If you decide to apply for a private student loan, be sure to find the loan that best suits your needs and circumstances. Credible makes this process easy. Simply complete an application and compare several lenders at once without affecting your credit rating.
When comparing different lenders, pay close attention to the following factors:
Annual percentage rate (APR)
The APR is a better indicator of the overall cost of a loan because it includes the interest rate and factors in all of the lender’s fees, such as origination fees, application fees, and late payment fees. .
Another factor in the overall cost of the loan is the length of your student loan repayment term, and most lenders offer repayment terms between five and 20 years. Generally, the longer the repayment term, the more affordable the monthly payments will be. But the longer your payments, the more interest you will pay, and the total cost of the loan is usually higher.
Private student loan fees can vary from lender to lender. Many charge late payment fees, return payment fees, and forbearance and postponement fees, while others do not.
Lenders can no longer charge prepayment fees, and many don’t charge origination fees.
Since excessive fees can offset lower interest rates, it is wise to pay close attention to the APR, which combines fees and interest rates.
Penalties for early repayment
Lenders do not charge prepayment penalties on federal or private student loans. This means that you can make additional payments or pay off your student loan debt entirely without paying a penalty.
Federal regulations allow lenders to apply additional payments to future loan installments. For this reason, you should ask your loan manager to apply any additional payment amount to the principal balance of the loan so that you can pay it back sooner.
You can find personalized rates from multiple lenders with flexible repayment plans when you find private student loans on Credible.