Guide to Financial Aid Options for Online College Students

Methodologies and Sources


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About 60 percent of jobs in the U.S. require some postsecondary education. Yet in 2015, there were about 111 million adults who didn't have college degrees. Most of them wanted to earn college credentials but saw cost as their greatest obstacle, according to a survey conducted by The Learning House, Inc. and Aslanian Market Research.

Fortunately, thanks to changes made to federal law in 2006, online students at accredited institutions may be eligible to receive federal aid, just as any traditional on-campus student would be. In this guide, you'll discover what financial aid options exist for eligible online college students, in a variety of life situations, and how to go about receiving those needed funds for your education.

Eligibility for Financial Aid

In terms of how to get financial aid for online college, federal financial aid eligibility relies on the following criteria:

  • Citizenship: You must be a U.S. citizen or U.S. national. If you don't have either status, you must possess a green card, an arrival-departure record from U.S. Citizenship and Immigration Services, "battered immigrant" status under the Violence Against Women Act or a T-visa or T-1 visa.
  • Educational qualification: You must qualify to receive a college or career school education by having earned a high school diploma (or the homeschool equivalent) or General Educational Development (GED) certificate.
  • Enrollment: You have to be enrolled or accepted for enrollment at an eligible (read: accredited) degree or certificate program.
  • Selective Service registration: Males ages 18 to 25 must be registered for Selective Service.
  • Social Security number: You must possess a valid Social Security number (except students from the Republic of Marshall Islands, Federated States of Micronesia or the Republic of Palau).
  • Signed FAFSA: You must complete the Free Application for Federal Student Aid, or FAFSA, which includes a signature certifying that you are not in default on a federal student loan, do not owe a refund on a federal grant and will use the federal student aid only for educational reasons.
  • Academic performance: Maintain your eligibility by earning satisfactory grades in your postsecondary programs. It's possible to lose eligibility for financial aid once it's received through poor academic performance.

Additionally, individual state and institutional financial aid awards, as well as privately administered grants and scholarships, may have their own eligibility requirements, such as a certain income threshold, a particular course of study, a particular grade point average (GPA), participation or membership in certain organizations or groups, belonging to a certain demographic or population and other criteria. It's important to read about any financial aid program's eligibility requirements before applying.

Types of Financial Aid Options for Online Students

According to the College Board, in school year 2016-17, the total of federal, state, institutional and private financial aid awarded came to a little over $181 billion for undergraduates and almost $58 billion for graduates. Here is how those dollars broke down by type of aid awarded.

Federal Financial Aid

Each year, the federal government makes available more than $120 billion in financial aid, through grants, loans and work-study programs, which students may only access by completing their FAFSA forms. In academic year 2015-16, an impressive 85 percent of first-time, full-time undergraduate students at four-year colleges, and 75 percent of students at two-year institutions received some federal aid.

About $30 billion of the federal budget for student aid goes toward need-based grants, which are financial awards that need not be paid back. Loans must be paid back; in 2017, the government financed about $100 billion in student loans. In work-study programs, students earn aid by working. Work-study programs allow students to work up to 20 hours a week on campus or in organizations in the community. The job may be related to your major or community service.

State-Sponsored Financial Aid

Most states in the U.S. offer some form of student aid. Usually, it's provided to students residing in those states — but not always. Often, state financial aid programs are developed with an eye toward boosting the state's college-going rate or generating more interest among students for high-demand careers or positions experiencing statewide worker shortages. For example, in Hawaii, students attending one of the 10 institutions that are part of the University of Hawaii Community Colleges system may be eligible for free in-state tuition, as part of Hawaii Promise, an effort to improve the state's college attainment. The usual first step in qualifying for these awards is the same as that for federal aid: completing the FAFSA. The federal government then forwards that important information to individual states' financial aid departments. Some states have their own application forms as well.

The National Association of Student Financial Aid Administrators (NASFAA) tracks individual states' available financial aid programs. Explore our individual state pages on OnlineDegrees.com to discover what financial aid programs may be available in your desired location.

College or Institution-Specific Financial Aid

The individual online college you're considering may have its own financial aid programs available, which may be contingent upon financial need, merit, path of study or some other specific criteria. They usually come in the form of grants or scholarships, which don't need to be paid back, and they may be awarded to students as incentives to draw students to attend those schools.

Again, in the case of school-specific financial aid, the FAFSA is used by individual colleges to determine need and how they may be able to assist students in affording enrollment. Individual schools may also have their own financial aid applications that students must complete in order to access financial aid, so it's important to discuss your needs with any prospective school to learn what its individual requirements are.


Grants are often called gift money, as those funds don't have to be paid back. Government grants are typically awarded based on students' demonstration of "exceptional financial need," although institutions may have different qualifications, which may not factor in need at all. Need — and total award amount — are usually determined by a complex calculation that takes into account factors like your expected family contribution; the cost of attendance, which includes tuition, books, technology, child or dependent care and other educational expenses; and any sources of funding you may already have (such as private scholarships). Some grants include stipulations, such as a requirement for performing some type of service. In 2014-15, 33 percent of online students relied on government grants to pay for their educations.

The federal government offers the following grants:

  • Federal Pell Grant: The Pell Grant is an annual award given to undergraduate students who show exceptional financial need and have not earned their bachelor's or professional degrees. Though the maximum individual award can change annually, in 2018-19, the maximum Pell Grant award per student was $6,095.
  • Federal Supplemental Educational Opportunity Grant (FSEOG): The maximum annual FSEOG award given is $4,000, and it is available to undergraduates who demonstrate exceptional financial need.
  • Teacher Education Assistance for College and Higher Education (TEACH) Grant: This grant for up to $4,000 per year is for undergraduate, postbaccalaureate and graduate students pursuing teaching careers who agree to participate in four years of qualifying teaching service.
  • Iraq and Afghanistan Service Grant: This grant is designed for students whose parents or guardians have died in military service in post-9/11 Iraq or Afghanistan but who did not meet the "exceptional need" requirement of the Pell Grant.

Check your individual state or prospective institution for other potential grant opportunities.


Thirty-four percent of online students received scholarships as part of their enrollments in 2014-15. And The Student Loan Report conducted a survey of 1,000 college students (online and on-campus) that found that of the 84.5 percent who did apply for scholarships, 55.86 percent of them won at least one of the scholarships they applied for. And yet of the more than $3 billion available to students through private scholarships each year, many awards go unclaimed simply because students don't know they exist. Apply to everything. The worst a scholarship provider can say is no.

Many reputable sources, such as The College Board, FinAid.org or Schools.com, allow you to search scholarships by field of study, along with other criteria such as gender, disability, ethnic or cultural background and more.

Scholarships Based on Field of Study

The major or degree you choose to study may even help you to qualify for financial aid. Each year, scholarships are offered to students who opt to study a wide range of subject areas, from accounting to zoology and everything in between. Often, these are created to drive interest in high-need fields, such as those in STEM subjects or nursing.

According to a study about online student characteristics conducted by The Learning House, Inc. and Aslanian Market Research, the top online fields of study among undergraduates were, in order of number of students:

  • Business
  • Computers and information technology
  • Health-related professions
  • Social sciences, criminal justice and law
  • Arts and humanities

Here's a small sampling of scholarships in these fields that students may find available:

Accounting: Frank L. Greathouse Government Scholarship is an $8,000 scholarship available for two graduate or undergraduate full-time students who are preparing for careers in state or local government finance.

Cybersecurity: The $5,000 (ISC)2 Undergraduate Cybersecurity Scholarship goes to students who are concentrating their studies on cybersecurity or information assurance.

Home health/Nursing: The Elizabeth J. Davis Scholarship was created to help home care professionals with being able to complete advanced degrees or to help students seeking undergraduate degrees in health professions. This scholarship awards $3,000.

Criminal justice: The Harold Johnson Law Enforcement Scholarship awards $5,000 to support students who aspire to train for police work, corrections or other criminal justice fields.

Art: The YoungArts Scholarship awards up to $10,000 and a master class in the student's artistic discipline to student artists in film, design, music, dance, photography, visual arts, theater and writing.

Additionally, many of these scholarships are offered to particular types of students studying these fields, such as women, African Americans, those affected by certain disabilities or illnesses or other such demographics.

Financial Aid Based on Demographics

It may interest you to note that The Student Loan Report study saw no marked difference in scholarship "win" rates among the various demographics surveyed. Any number of scholarships may be available to students based on age, gender, race, socioeconomic class, profession, religious or cultural background, or family history.

Here are some tips to maximizing your chances of receiving a demographic-based scholarship:

  • Answer the "optional" questions on your FAFSA. Students who complete the optional questions are twice as likely to be matched by to potential scholarships by online scholarship matching services. These questions about personal background are designed to trigger certain types of scholarships in these searches, so answering them may widen your pool of options.
  • Make a list of your hobbies and attributes. These days, there are scholarships for nearly every passion imaginable, from writing to building robots, duck calling or quilting. Once you've got a list, start your online search — you might be amazed at what's available.
  • Consult with clubs and local organizations. Many local groups, from clubs to professional or charitable organizations or even religious groups and churches, provide students with money for college. Your parents' employers may even offer scholarships you've never heard of. Check with every club and organization you and your family are affiliated about whether they provide scholarship money.
  • Talk to high school guidance counselors. These professionals are tasked with maintaining lists of scholarships that their students may qualify for. They may know of local opportunities that aren't readily known by students and their families.

Employer-Sponsored Tuition

If you're currently employed and considering returning to school to advance your career, your employer may help you foot the bill. The IRS allows employers to provide up to $5,250 in tuition assistance per employee each year, and that amount is not taxable. These funds may be used for educational expenses, including courses, books, supplies or equipment that students need to purchase as part of their schooling. Additionally your employer may offer scholarships or even cover the cost of professional exams for licensure. Consult directly with your employer's human resources department to learn what options you may have.

Common Documents Often Requested for Financial Aid Applications

In order to access financial aid for your education, you should expect to complete some or all of the following forms, depending upon your chosen school and circumstances:

    • FAFSA: As noted earlier, the FAFSA is the gateway form to accessing federal, state and even some institutional financial aid programs. Don't assume you won't qualify for anything. If you don't fill it out, you'll never know. The form is long — 100-plus questions — so be prepared to spend a bit of time to accurately complete it. You'll be asked to provide personal data, personal income for your parents or household, tax information from the previous year and details about your intended school.

The online FAFSA form enables students to access online or telephone assistance. Also, most high schools and college financial aid departments employ counselors or advisers who can assist students with this process.

  • Timing: The FAFSA is available October 1. High school students should fill this out in fall of their senior year of high school. Adult students should plan to do so in the fall prior to the year they plan to attend school.
  • College Scholarship Service (CSS) Profile: This detailed online form gives students access to information about more than 400 nonfederal, institutional and organizational grants totaling more than $9 billion. This form provides a more accurate picture of your finances than the FAFSA because it asks for a more thorough picture of a family's income than FAFSA. It also asks for more financial documentation.
  • Timing: The CSS Profile is also available October 1. Plan to complete it in a timely fashion in order to improve your chances of receiving awards.
  • Financial Aid Application Certification form: Signing this form certifies that the information contained in your FAFSA is correct, and that the IRS and U.S. secretary of education have your permission to verify the information you've provided.

You may also be asked to complete state- or institution-specific financial aid applications, as well as forms pertaining to your tax-filing status. Speak directly with your desired school's financial aid office to ensure you are completing all necessary forms.

When Can You Expect to Hear About Financial Aid Awards?

Typically, students receive their financial aid offer letters around the same time as when they receive offers of admission, though this may not always be the case. Your college can usually tell you when you can expect to receive your award letter.

4 Tips for Online Students Seeking Financial Aid

If you're like most online students and you're relying on financial aid in order to afford college, here are some tips that might help:

  1. Take advantage of free resources. Your high school counselor, college financial aid specialists and state and federal department of education representatives are all keenly focused on getting (and helping!) more students to complete their FAFSAs, receive financial aid and complete their college degree programs. If you're struggling, ask for help. Don't let a confusing form stand between you potential college funding.
  2. Don't assume your income or age disqualifies you for financial aid. In fact, a Sallie Mae survey found that 16 percent of high-income families received an average $6,580 in grants in 2014. And for many scholarships, income isn't a factor in determining who receives money. In fact, returning adults who want to attend online college may actually qualify for specific scholarships intended for that demographic.
  3. Don't pay anyone for college financial aid. The FAFSA is entirely free to complete, as is the CSS Profile. Any legitimate source of financial aid should not have an application cost; don't give money to anyone claiming to offer scholarship or grant dollars for a fee. And on that note, no one should need to run a credit check on you.
  4. You can't receive financial aid from federal, state or local entities if you don't attend a regionally accredited program, so before you consider attending any online college, check its accreditation status with the U.S. Department of Education.
Methodologies and Sources