Online University and Federal Student Aid

Not so long ago, the words “online university” had a very dubious distinction, bringing to mind images of crooked, for-profit “institutions” issuing degrees and certificates that were not earned, but merely paid for. And while some of these “diploma mills” still exist, the majority of colleges that offer online programs are now universities that are accredited and, at least for the most part, quite legitimate. But what exactly was the genesis for this change? When did the notion of studying via an online university go from “shady” to valid, and why have so many traditional universities now begun to offer more and more courses and degree programs online? Certainly you could point to improvements in technology as a key reason for this shift, but perhaps the primary origin of this seemingly exponential rise in online education was a budget bill that finally allowed for federal student aid for those studying at an online university.

Online University and Federal Student Aid

Prior to 2006, most online universities were of the “for-profit” variety and not very well respected. Most of these schools would require those students who wanted to pursue an online degree to pay thousands of dollars in fees without the benefit of federal student aid. Now during this time, there were, of course, a few legitimate colleges offering accredited degree programs, but these were few and far between, and because of the manner in which most of the online universities operated their reputation took a major hit. In fact, the general rumor was that if a student had enough money he/she could buy any degree they wanted. Businesses also knew of these rumors, but sadly, what many of these students didn’t realize at the time was that most major employers weren’t even recognizing these types of degrees—a harsh fact that left many of these students thousands of dollars in the hole with no way to recoup their losses.

Much of this changed, however, in 2006, opening up a brand new frontier in higher education. It was in that year that, with just a couple of short paragraphs in the budget bill for the US Congress, the rules regarding federal student aid for online colleges would change forever. With the President and both sections of the House firmly behind the bill, and citing advances in technology and budget cuts in education as their primary reasoning, the prior stipulation—a stipulation which formerly required universities to deliver at least half of their courses on a campus rather than online to qualify for federal student aid—was finally removed.

In essence, these few lines in the budget bill had a two-pronged effect. First, because students could now receive federal aid from an online university, thousands of traditional and accredited colleges from around the country got busy creating online degree programs in hundreds of different majors—programs that according to recent studies have been just as effective as those offered in a traditional classroom setting. The second effect this budget bill had was that it drove many of the not-so-legitimate colleges slowly out of business. With so many choices being offered from “real” universities that students actually trusted, the demand for the for-profit colleges diminished rapidly.

Today online universities continue to increase in popularity, affording many students—students who would otherwise be excluded from pursuing higher education due to financial or geographical limitations—the opportunity to continue their education. To date, the availability of federal student aid, coupled with widespread access to new and improved technologies, have allowed thousands of students to pursue and obtain a recognized degree from an accredited online university.