Is Financial Aid Different for Online School Than In-Person?

Is Financial Aid Different for Online School Than In-Person?

Is financial aid different for online school than in-person? Many students question if this is the case, and with the growing popularity of online programs, understanding how financial aid applies to both formats is vital. This blog offers clarity to help you make informed decisions about your higher education financial aid options.

Is Financial Aid Different for Online School Than In-Person?

Financial aid can be different for online and in-person classes. This means you might qualify for less coverage or different kinds of scholarships and grants if you choose online courses. Additionally, state-specific aid may only apply to in-person programs. Choosing accredited online and in-person programs is important, as only accredited programs are eligible for federal assistance.

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Financial aid for online and in-person programs includes grants, scholarships, loans, and work-study programs. Grants and scholarships do not require repayment, making them the most sought-after option. Loans must be paid with interest, while work-study programs offer part-time jobs to earn money to cover education expenses.

In both formats, students can apply for federal financial aid by completing the FAFSA. Many states and institutions also offer aid, which may have specific eligibility requirements.

Types of Financial Aid Available for Online Students

Online students have access to a variety of financial aid options. These include federal aid, state-funded assistance, institutional support, and private scholarships and grants. Each type of aid has its specific requirements and application processes.

Here’s the breakdown of different financial aid options and their pros and cons.

Federal Financial Aid

Federal financial aid for online students is similar to the options available to in-person students. The main types of federal aid include:

  • Pell Grants
  • Federal Supplemental Educational Opportunity Grants (FSEOG)
  • Direct Subsidized and Unsubsidized Loans
  • PLUS Loans

To qualify for this aid, students enrolled in online and in-person programs need to fill out the Free Application for Federal Student Aid (FAFSA). This form helps the government determine how much financial help a student needs based on their family’s income and other factors.

Here are some of the pros and cons of federal financial aid for online students:

Eligibility requirements are the same for online and in-person studentsLimited funding is available, so not everyone receives aid
Can help cover tuition, fees, and other education costsLoans have to be repaid with interest over time
Grants don’t have to be repaid, unlike loansThe process of applying for aid can be complicated and time-consuming

State Financial Aid

State financial aid can vary depending on which state you live in. However, the main types of state aid generally include federal grants, scholarships, and loan programs.

Many states offer need-based grants that don’t have to be repaid. Most state financial aid is available for students enrolled in online programs. To qualify, online students need to fill out the FAFSA since some state aid is based on federal aid eligibility. Some examples of state grant programs include the Cal Grant in California and the Tuition Assistance Program (TAP) in New York.

State governments also provide scholarships based on academic merit or the student’s planned career field, such as teaching or healthcare. These scholarships can be used at both online and traditional in-person colleges.

More flexible, available to in-person and online studentsEligibility and award amounts can vary by state
Can help offset the cost of online educationApplication deadlines and requirements may be earlier for online students
May have additional state aid options for distance learnersLess direct oversight and support from the state for online programs

Institutional Financial Aid

In addition to federal and state aid, many colleges and universities provide financial assistance directly to students. This is called institutional financial aid.

Some common types of institutional aid include:

  • Merit-based scholarships
  • Need-based grants
  • Work-study programs
  • Institution-specific loans
Man reading printed documents with his laptop in front of him

The requirements and amount of this aid can vary between schools. Many online programs offer the same institutional aid opportunities as traditional ones. Merit-based scholarships are awarded based on academic performance, community service, or other achievements. The institution’s need-based grants can help cover any remaining tuition costs after receiving federal and state aid.

Make higher education accessible to studentsCan lead to student debt that may take years to repay after graduation
Renewable for multiple yearsMay have stringent requirements
May include work-study opportunitiesDependency on external factors leads to uncertainty for students

Private Scholarships and Grants

Many private organizations offer grants and scholarships to help students pay for college education. These are funds that you don’t have to pay back. Private scholarships and grants can come from a variety of sources, such as:

  • Foundations and non-profit groups
  • Businesses and corporations
  • Private donors and individuals

The award requirements are academic achievements, community service, field of study, and personal background. Many websites and databases compile information on thousands of different private scholarship opportunities. The good news is that online students can also apply for these grants.  

Can significantly reduce education costsThe application process is often time-consuming and competitive
Several awards based on diverse criteriaSeparate procedures for federal and institutional aid
Opportunities are available to both online and in-person studentsMay have strict eligibility requirements or deadlines

Comparing Financial Aid Options for Online and In-Person Schools

When deciding between the two formats, it is important to understand how their financial aid process can differ. There are a few key areas where financial aid for online and traditional on-campus schools varies.

Application Process

Some online schools may have different application deadlines or require additional forms. Students should review each institution’s specific requirements. In-person programs typically follow a more structured process and timeline. Online programs may provide more flexibility.

Eligibility Criteria

Both online and in-person schools follow federal guidelines for determining financial aid eligibility. These guidelines consider financial need, enrollment status, and satisfactory academic progress.

Online programs may have specific criteria, such as minimum enrollment levels or residency requirements. In contrast, in-person programs mandate that students attend a minimum number of credit hours at a physical location to be eligible for financial aid.

Award Amounts

Award amounts depend on the cost of attendance and the student’s financial need. Online schools typically offer smaller awards due to lower general costs.

In-person schools may offer larger financial aid packages to cover tuition, housing, and other campus-related expenses. However, some online schools are known for their generous financial aid packages as well.

Disbursement and Use of Financial Aid

Disbursement processes are typically similar for both online and in-person schools. Federal aid is generally credited directly to the student’s school account, covering tuition and fees first.

Any remaining funds are then disbursed to the student for other educational expenses. Online students may receive funds based on state regulations or the institution’s policies. So, before applying, understand your school’s disbursement schedule and how you are allowed to use the aid.

Woman using her computer while studying

Challenges and Opportunities in Financial Aid for Online Students

Over the past three decades, college tuition has risen significantly, with costs at public four-year colleges increasing from $4,160 to $10,740 and private nonprofit institutions from $19,360 to $38,070 (adjusted for inflation). As a result, the demand for financial aid options for graduate studies has also increased.

Accessibility to financial aid options may seem similar to traditional in-person learning. However, there are key differences that students must understand to maximize their chances of securing aid.


Online students often struggle with limited access to campus-based resources. Many universities offer in-person financial aid counseling and workshops, which cannot be accessed by students enrolled in online programs.

Verification processes also lead to hurdles. Remote submission of required documents for financial aid verification may cause delays.

Federal aid eligibility can sometimes become a sticking point. Some online programs might not meet the eligibility criteria set by federal aid requirements.  


Online education often comes with more flexible scheduling. Attending classes while working part-time can reduce the need for loans and financial aid.

In addition, many institutions now offer scholarships specifically for online students. These can help students cover tuition costs.

How to Maximize Financial Aid for Online Students

Securing financial aid for online programs often requires a different approach compared to traditional programs. By following guidelines, online students can maximize available financial support and make their education more affordable.

Complete the FAFSA Early

Submitting the Free Application for Federal Student Aid (FAFSA) as soon as possible increases your chances of receiving the maximum aid. Early submission assures you meet deadlines and have access to a broader range of financial aid options.

The FAFSA application opens on October 1 each year, and funds are often distributed on a first-come, first-served basis. As an online student, staying on top of these deadlines is vital, especially since you might not have in-person reminders.

Explore Scholarships for Online Students

Many scholarships are specifically tailored for online students. Research and apply for these opportunities, as they can provide additional funding that doesn’t need to be repaid. Use scholarship search engines that filter for online programs, visit your school’s financial aid website, and look for professional organizations related to your field of study that support distance learning.

Two students studying outdoors with their laptop

Some scholarships may require essays, letters of recommendation, or proof of enrollment in an online program, so be prepared to provide the necessary materials.

Maintain a Strong Academic Record

A good academic record can increase your eligibility for merit-based aid. Consistently achieving high grades may qualify you for scholarships and grants that are awarded based on academic performance.

As an online student, managing your time and staying disciplined in your studies can help you maintain a high GPA. Engage actively in your courses, participate in discussions, and use resources provided by your institution.

Communicate with Your Financial Aid Office

Regularly check in with your school’s financial aid office. They can provide valuable information about additional funding opportunities and help you navigate the financial aid process effectively. Since you are not on campus, take advantage of virtual appointments, emails, and phone calls to stay connected.

Ask about grants, scholarships, or work-study programs available to online students. Financial aid advisors can also assist with understanding your award letters and making informed decisions about loans and repayment options.

Seek Employer Tuition Assistance

If you are currently employed, inquire about tuition assistance programs offered by your employer. Many companies provide financial support for employees pursuing further education, including online programs. Check your employee benefits package or speak with your human resources department to learn about available programs.

Employer tuition assistance can cover various expenses, from tuition and fees to books and supplies, and can be a valuable resource in reducing out-of-pocket costs. Make sure your employer knows your education is online, which can often be more flexible and align better with your work schedule.

Related Questions

Is Online Learning as Effective as In-Person Classes?

Yes, online learning can be as effective as in-person classes. Studies show similar academic outcomes when courses are well-designed and engaging. Flexibility and interactive course material contribute to the success of online education.

Are There Unique Financial Aid Risks with Online Programs?

Yes, online programs can have unique financial aid risks. These include issues like accreditation status, eligibility for certain types of aid, and potential limitations on funding. It’s vital to verify that your online program is accredited and understand the financial aid options available to online students.

How Can Online Students Avoid Excessive Student Debt?

To avoid excessive debt, online students should only borrow what is necessary, explore employer tuition assistance, and create a detailed budget to understand the costs. Additionally, enrolling in an income-driven federal loan repayment plan can help manage debt after graduation.


Financial aid for online and in-person schools is generally similar. However, tuition fees and other expenses can differ, impacting the total amount of aid available. Students should review each school’s policies and plan their finances accordingly.

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