Online School Student Loan Laws
Before 2006 many online students were unable to receive federal aid. In 1992 Congress enacted the “50% Rule,” mandating that schools qualify as financial aid distributors by offering over 50% of courses in traditional classrooms. In 2006 the law was overturned. Today a growing number of online schools offer federal student aid. To offer aid, schools must still meet requirements. However, the percentage of online courses is of no consequence.
Find an Online School Offering Federal Student Loans
Keep in mind that not all online schools offer federal student loans. To find out of your school is able to distribute student loans, call the school’s financial aid office. You may also search for the college’s Federal School Code on the federal financial aid website (off-site link).
Qualifying for Federal Student Loans
To be eligible for federal student loans you must be a U.S citizen with a social security number. You must have a high school diploma, a GED certificate, or have passed an alternative exam. You must be enrolled as a regular student working toward a certificate or degree at a school that is eligible to offer federal aid.
Additionally, you must not have certain drug convictions on your record (convictions that happened prior to your eighteenth birthday don’t count, unless you were tried as an adult). You cannot currently be in default for any student loans you already have, or owe the government refund money from grants you were awarded.
If you are a male, you must register for the Selective Services.
If you don’t meet these qualifications, it’s still a good idea to discuss your situation with a financial aid counselor. There is some flexibility with the rules. For example: some non-citizens are eligible to apply for federal aid, and students with recent drug convictions may be able to receive aid if they attend drug rehabilitation.
How Much Aid Will You Receive?
The type and amount of federal aid you receive is determined by your online school. Aid amount is based on several factors including your financial need, your year in school, and the cost of attendance. If you are a dependent, the government will determine an expected family contribution (how much your family should be expected to contribute, based on your parent’s income). For many students, the entire cost of college attendance can be covered by federal student loans and grants.
Applying for Federal Student Loans
Before applying for federal student loans, set up an in-person or phone appointment with your online school’s financial aid counselor. He will be able to offer advice for applying and suggestions for alternative sources of aid (such as scholarships and school-based grants).
Once you’ve collected the needed documents such as social security numbers and tax returns, it’s easy to apply. You will need to fill out a form called the Free Application for Federal Student Aid (FAFSA). The FAFSA can be filled out online or on paper. See the FAFSA website for detailed application information and forms: www.fafsa.ed.gov.
Using Student Loans Wisely
When you receive your federal aid award, the bulk of the money will be applied to your tuition. Any remaining money will be given to you for other school-related expenses (textbooks, etc.) Often, you will be eligible to receive more money than is necessary. Try to use as little money as possible and return any money you do not need. Remember, student loans must be repaid.
Once you finish your online education, you will begin student loan repayment. At this point, consider refinancing your student loans so you have one monthly payment at a lower interest rate. Meet with a financial counselor to discuss your options.
via Federal Student Loans for Online College Students – How to Apply for a Federal Student Loan.
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