How to Borrow Student Loans for Online College

Facebook icon Twitter icon Print icon Email icon

By Nick Mann

April 9, 2020

Online college has become an increasingly popular option for many of today’s students. While it can be more affordable than attending a traditional brick-and-mortar college, it still comes at a significant cost.

So naturally, many people will be interested in borrowing student loans to help cover it. Here are the basics of what you need to know. First of all, if you have money saved in a 529 college saving plan, you can use that to pay for online classes at an eligible institution


Can You Still Borrow Student Loans for Online College?

Yes, student loans are available for online school just like they are for a traditional college, and you can still borrow them as long as you meet two key criteria. 

First, the school you attend must be accredited by a federally-recognized accrediting agency. “Accrediting agencies are private organizations that work to ensure academic institutions within its jurisdiction meet acceptable levels of educational quality,” according to Accredited Online Schools. 

Second, the college has to be located within the United States.

It should also be noted that most but not all online schools accept financial aid. Each institution has its own unique policies regarding this, so you should always check with your college to make sure. 

When it comes to the specific type of student loans, there are two options — federal or private. 

Federal Loans

These loans are offered by the federal government. Most experts recommend this as a first option because they: 

  • Come with a relatively low, fixed interest rate
  • Have flexible repayment options
  • Don’t usually require a cosigner 
  • May be eligible for student loan forgiveness if you work in a certain career field

To apply for federal loans, you’ll first need to fill out a FAFSA application to determine how much federal aid you’re eligible for. From there, your school will send you a financial aid offer based on the results and let you know how to accept either part or all of the loan. 

For more information, check out this resource from Federal Student Aid

Private Loans

These loans come from private lenders, such as banks and financial institutions. While private student loans can certainly be viable and helpful for covering the costs of tuition, they have some notable drawbacks. 

For instance, they:

  • Usually have higher interest rates than federal loans
  • Often require a cosigner
  • Aren’t eligible for certain federal perks, including student loan forgiveness, an income-based repayment plan, and generous deferment options during times of unemployment and economic hardship 

That said, if you have an excellent credit score, you may be able to lock in a lower interest rate with a private loan. These lenders may also have flexible borrowing options that can be helpful when you’re looking to fill in the financing gaps. 

Just note that not all online schools are eligible for loans from private lenders, so you’ll need to check with a lender beforehand. 

After finding a private loan, you’ll need to fill out an application and provide your contact information, personal information and school information. They’ll review it and let you know whether or not you’re approved, a process that typically takes a few days. 

Sallie Mae offers a cosigner release and free tutoring for borrowers. They also have a lot of cool perks, including a free scholarship search, credit cards for college students and sweepstakes for cash for college.

Discover offers no late fees, an auto-debit discount and job and career assistance.

College Ave offers a cosigner release, a graduation discount, and an auto-debit discount.

LendKey offers a cosigner release, job and career assistance, and the ability to customize your due date.

Credible is a great tool for comparing multiple private lenders at once.

Are There Special Lenders or Loans Specifically for Online College?

No, at the moment, there aren’t any lenders or loans that are solely tailored for online college. Although there are organizations that specifically have scholarships for online students, this isn’t the case for student loans. 

Things Borrowers Should Keep in Mind

Always go for free money first, including scholarships and grants. Compare different online programs and factor in price when making your decision. Continue to meet with an advisor so you are taking courses that count towards your graduation. 

In many cases, individuals enrolled in online schools are more likely to over-borrow with their student loans. That’s because they don’t have many of the additional costs of traditional school like transportation and room and board. 

So, take this into consideration when figuring out how much you need to borrow, and avoid taking out more money than you really need. 

 At, our goal is to help you make smart decisions about saving and paying for education. Some of the products featured in this article are from our partners, but this doesn’t influence our evaluations. Our opinions are our own.


A good place to start:

See the best 529 plans, personalized for you