Federal Financing for Your Online Education

63 percent of all undergraduates received some form of financial aid in the 2003-04 school year, according to the most recent figures from the National Center for Education Statistics. Federal financial aid can take much of the burden off your shoulders, and distance learning students can benefit from funding in the same way they would at traditional schools.
Grants and loans usually make up much of the typical student's financial aid package. While grants do not typically have to be repaid, loans can come with different interest rates, grace periods, and other repayment terms.
Federal Financial Aid: The Basics
Before you can qualify for federal financial aid, you should fill out a Free Application for Federal Student Aid (FAFSA). The online application typically requires information about your earnings, expected family contribution, and other personal and financial information. From there, your expected need is determined.
Here are the most popular sources of federal financial aid:

• Pell Grant: Provides need-based financial assistance to undergraduates at approximately 5,400 participating postsecondary institutions. Grant amounts are determined by factors like your Expected Family Contribution (EFC).
• Supplemental Educational Opportunity Grant: Available to undergraduates with exceptional financial need. Awards range from $100-$4,000.
• Stafford Loan: Federal student loans available to undergraduate and graduate students. These loans must be repaid after a grace period, usually a few months after you graduate or leave school.
• PLUS Loan: Available to parents of dependant undergraduate students. PLUS loans offer a reasonable interest rate to parents who choose to help finance their child's education.

Accredited online colleges and universities should have access to federal student aid programs. Check with your school to be sure you qualify.
Sources:
FAFSA
NCES