Due to the coronavirus pandemic and the development of IT, online education has become widespread among American students. However, can students who go to online colleges take student loans? What do you need to know for this, and how to properly submit documents for obtaining a loan in detail?
In this article, we will explain to you how online students apply for student loans.
Are there student loans for online education?
Until ten years ago, it was almost impossible to get a loan for online classes. First, you need to apply for federal loans. For this, you need to fill out an online application and then wait for a response from government agencies that provide loans. But even if, for some reason, you are denied federal loans, you should not despair, as you can go to banks for private loans. The main disadvantage of private loans is the higher interest rate, but after examining all the options in advance, you can find the most suitable offer for you.
However, before applying for loans, you should first consider other options, such as scholarships and grants, often awarded by colleges.
FAFSA for online students
Applicants must complete the Free Application for Federal Student Aid to apply for federal and private loans. Your application process will not differ in any way from traditional students.
After completing the application, you will need to print it and send it to the location you need, for example, to a bank or the United States Department of Education. Below we take a look at the federal loan options available to online college students.
Federal Direct Loans
This type of loan is the most popular and affordable among American students, regardless of the mode of study. However, this type of loan also has its categories with specific details that are worth knowing:
1. Direct Plus Loans. These loans are most often issued to bachelor’s parents, less often to graduates. This type of loan can cover not only tuition fees but other costs as well.
2. Direct Subsidized Loans. These loans are available to students who are in financial need of assistance. But for this, it will be necessary to prove the impossibility of paying for tuition. In addition, you may be required to report income, housing availability, and more. Unsubsidized Loans are issued to undergraduate and graduate students, but unlike the first option, this type of loan does not require proof of financial need.
3. Direct Consolidation Loans. These loans are available for those students who have already taken on many loans and need to combine all these loans into one large loan that will be paid off once a month.
4. Federal Perkins Loan Program. In case of financial difficulty, you can also apply for the Federal Perkins Loan. The advantage of this loan is the low-interest rate. However, not every online college may have access to this program, so you must do your research beforehand.
Private loans for online students
You should consider private loans from banks in two cases:
1. You have been denied federal loans, scholarships, and grants;
2. Federal loans cannot fully cover your online college tuition costs.
It would help if you also remembered that private loans have a higher interest rate, and the conditions for obtaining loans may vary depending on the bank. In some cases, you will need to start repaying the loan from the first month of signing the contract with the bank. In others, you will be able to start repaying the loan after you graduate from college. Moreover, be sure to calculate the exact amount you need. Do not take an extra amount on credit because you will have to pay interest in the future for money that you do not need. Also, pay your student loan on time. With frequent delays in repayment, your credit score may drop, which will further cause banks to mistrust you.
People used to think that it was only through traditional college education that it was possible to take student loans. However, times are changing, and there are many student loan options for online students, both federal and private. First, you need to look for scholarships, then federal loans. And leave private loans at the very end even though colleges in the United States are free of charge, many lucrative options for American students to help you cover their online tuition costs.