How to Pay for Online College

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By Nick Mann

April 15, 2020

Online degrees cost an average of $30,000 total — nearly a third of what traditional degrees cost at $85,000. This makes online college a more affordable option, which is appealing to many students. 

That said, it still costs a significant amount of money and students must come up with a realistic means of funding it. Here are some ideas for how to pay for online college. 


“Despite the scholarship myth you may have heard of, distance learning scholarships are available to students attending classes online,” according to So, scholarships should always be your first step when looking for financing. 

There are numerous scholarships available specifically for online students. Online College Plan has a list of the top 50, and Nonprofit Colleges Online has another extensive list to check out. They run the gamut from renewable energy scholarships to students with disabilities to individuals studying in the technology field. 

Browse through these lists to find opportunities that apply to your area of study, and click the links for details on how to apply. 

Sallie Mae and have a free scholarship search.


If there has been any money saved in a 529 plan, you can use that to pay for online courses.

Tuition Assistance

Work for an employer that offers tuition assistance as a benefit.

Federal Aid

Given that online programs don’t involve attending a physical campus, many students wonder whether or not they’re still eligible for federal financial aid. The short answer is yes, but there are two main pieces of criteria that must be met.

First, the school must be located within the United States. Although it’s possible to receive federal financial aid while attending some foreign schools, eligibility ceases if any part of the program is online. Second, the school you enroll in must be accredited by a federally recognized accrediting agency. This means that it meets basic standards and has been verified as legitimate. 

The easiest way to find out if a college is accredited is to check their website. “Most accredited educational institutions will have a link to their accreditation status on the bottom or corner of their front page,” according to Accredited Schools Online. They should be recognized by the Council for Higher Education (CHEA) or the U.S. Department of Education. If you’re unsure, contact the school directly to ask. 

Once you’ve confirmed that it’s accredited, you can apply for federal grants or federal student loans. Just like with a traditional offline program, you’ll need to fill out the FAFSA form

Private Student Loans

Borrowing for college should be avoided. If you need to borrow student loans, first opt for federal student loans. These come with the potential for forgiveness, the ability to pause payments if you lose your job or have an economic hardship and you can make lower monthly payments based on your income.

If you need to borrow private student loans, learn how to borrow responsibly and keep costs as low as possible.

Many online students also wonder if they’re eligible for private student loans from independent banks and lenders. Again, the answer is yes, with a caveat. 

One is that the college you attend must accept financial aid from the specific private lender you’re considering. Every online college is different, and some won’t allow students to receive funds from private lenders — even if they allow federal student loans. 

That’s why you should check with your school directly to see what their policy is on this and see what private lenders they’ll accept. 

Also, note that there are some considerable disadvantages of private student loans when compared to federal student loans:

  • Many private student loans require cosigners
  • They tend to come with higher interest rates that may not always be fixed
  • They lack many federal protections like loan forgiveness, deferment and forbearance

Therefore, most experts suggest exhausting scholarships, grants and federal student loans before moving onto private student loans. 

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

Many private student loan lenders offer different types of perks. Here are some examples:

  • Sallie Mae offers free tutoring services to borrowers, cosigner release if you meet qualifications, flexible repayment terms up to 15 years and options to request to temporarily pause payments in times of financial difficulty.
  • College Ave offers flexible loan terms up to 15 years, possible extensions for grace period or forbearance options, a cosigner release and parent loans get to control spending.
  • LendKey offers a chance to put loans in forbearance during economic hardship, cosigner release, and a 0.25% interest rate reduction if you enroll in automatic payments.
  • Discover doesn’t charge any fees and gives a one-time cash reward for good grades (above a 3.0 grade point average).

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:

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