How To Get A Student Loan For Online School

Taylor Medine is a staff writer at Forbes Advisor who demystifies complex money topics to help everyday people make more informed financial decisions. Over her nearly a decade of experience, Taylor's work has been published on Bankrate, Experian, Credit Karma, MarketWatch, The Balance and more.

Taylor Medine

Taylor MedineStaff Writer

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Caroline BasileMortgages and Student Loans Deputy Editor

Caroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She holds a degree in journalism from the University of North Texas. When she’s not working on finance-related content, Caroline enjoys baseball, traveling and going to concerts.

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Caroline Basile

Caroline BasileMortgages and Student Loans Deputy Editor

Mortgages and Student Loans Deputy Editor

Reviewed

Updated: Feb 12, 2024, 10:49am

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How To Get A Student Loan For Online School

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With many universities now offering online-only degree programs, you could get your first and next degree or certification from the comfort of your couch or home office.

While online classes can be cheaper than attending in person, tuition for a full-time online course load can still add up to a sizeable sum. Yet, it’s possible to borrow money for online school as long as the institution has the right accreditation.

Can I Get a Student Loan for Online School?

Yes—you can get student loans for online degree programs if the school meets requirements set by federal and private loan programs.

To qualify for federal loans, you must be enrolled or accepted to an accredited degree or certificate program. You can search to see what schools are eligible using the government’s Database of Accredited Postsecondary Institutions and Programs website.

Borrowers must also meet the following requirements to get financial aid:

Be a U.S. citizen or eligible noncitizen
Attend school at least half-time or full-time
Have a valid Social Security number
Show you’re qualified to obtain a college or professional degree by graduating high school, getting your GED or completing a career pathway program

Each private lender has its own school eligibility requirements for student loans. For example, SoFi private student loans can be used at Title IV nonprofit colleges or universities where at least 25% of students graduate with a bachelor’s degree or higher.

Sallie Mae offers loans for nonprofit schools along with commercial flight training schools and coding academies that meet conditions. For-profit schools may also be eligible for Sallie Mae loans on a case-by-case basis.

Federal Student Loans for Online Schools

Students must meet Free Application for Federal Student Aid (FAFSA) requirements and fill out the application each year to get federal loans for online schools. The FAFSA form asks questions about your finances to determine how much financial aid you’ll get.

Once the FAFSA is complete, you’ll get a financial aid award letter from the school, which outlines any federal loan offers. Examples of universities that accept the FAFSA for online school include Arizona State University, Capella University, Purdue Global, Southern New Hampshire University and the University of Florida.

These are the types of federal student loans you could use for an online program:

Subsidized direct loans: Needs-based federal loans for undergraduate students. Interest isn’t charged while you’re in school and during periods of deferment.
Unsubsidized direct loans: Loans for undergraduate and graduate students that aren’t based on financial need. Interest starts accruing on unsubsidized loans as soon as loans are disbursed and during periods of deferment or forbearance.
Grad PLUS loans: Loans for students pursuing graduate or professional degrees. Interest accrues on Grad PLUS loans as soon as they’re disbursed. Since interest rates on Grad PLUS loans are higher than other federal loans, it’s generally best to use all other federal loan options before falling back on these loans.

Private Student Loans for Online School

Private student loans for online college vary by lender. In general, loan terms for private student loans can range from five to 25 years. Some lenders limit how much you can borrow, while others let you borrow up to 100% of the cost of attendance.

Private loan payments are generally due while attending school. However, lenders may let you make interest-only payments or defer payment until after you leave school.

Interest on private student loans may be fixed or variable and set based on your credit. If you have limited credit or low income, applying with a co-signer could help you get approved.

The best private student loan lenders clearly outline terms, interest rates and fees on loans so you can compare your options.

Other Ways To Pay for Online School

Borrowing money is just one way you can pay for an education. Below are other options you could consider to pay for your education.

Grants

Like loans, you can also get grants for online colleges. A grant is a type of need-based aid you don’t need to repay. Filling out the FAFSA makes you eligible for federal grants, such as the Pell Grant. Pell Grants are awarded based on how your income compares to poverty guidelines.

The maximum Pell Grant amount for the 2023-24 school year is $7,395. For the 2024-25 school year, expansion of eligibility criteria is projected to provide grants to 610,000 more students. An estimated 1.5 million students will qualify for the maximum grant amount.

Scholarships

Organizations and nonprofits may offer scholarships based on academic or extracurricular achievement. Scholarships are another type of aid that doesn’t require repayment.

Students can find scholarships to apply for through different organizations, and there is no limit to the amount of scholarship money you can qualify for.. Scholarships.com and Fastweb.com are two examples of websites with searchable scholarship databases you can use to find opportunities.

Payment Plans

Some schools offer payment plans so you don’t have to pay tuition in one lump sum. Payment plans could break up your payment for each semester into installments, giving you time to save up and pay what’s due over several months.

College Savings

If you’re thinking about going to school next year or a few years from now, you could consider using a 529 plan to prepare for school costs. There are two types of 529 plans—education savings plans and prepaid tuition plans.

The 529 savings plan lets you invest college savings in portfolios. Investment earnings grow tax-free, and you can withdraw money tax-free as long as you use the cash for eligible school costs, like tuition and equipment. Prepaid tuition plans let you purchase tuition for future classes at today’s rates to protect you against tuition inflation if college costs rise.

Income Share Agreements (ISA)

ISAs are a unique school agreement that lets you pay for your education or training program through a percentage of your future salary instead of paying upfront. For example, after leaving school, you might be required to pay 8% of your salary over 60 payments.

Terms and fees of ISAs can vary so it’s important to read the fine print. Also, not all institutions offer ISA plans, so you’ll have to research programs that have this option.