Financial Aid Overview and Scholarships

Students hoping to attend a medical billing and coding school online with financial aid should begin their search for funding early. Aid is available in several forms, including loans, scholarships, and grants, and they can come from either government or private funders.

Is Financial Aid Available for Online Medical Billing Programs?

The FAFSA

The Free Application for Federal Student Aid (FAFSA), is the first step in finding financial aid for online medical billing and coding schools. The application opens on Oct. 1 of each year, and information from the FAFSA helps government and some private lenders determine which students are eligible to receive financial aid and in what forms and amounts. Aid options include federal loans, grants, and work-study programs, each of which can help recipients fund their higher education.

FAFSA applicants should prepare to provide their Social Security number, proof of ID, and tax information. Aid is often reserved for students who demonstrate financial need, but some may qualify based on social background or academic merit.

Determining Your Financial Need

The government decides how much money to lend qualifying students based on two numbers provided by the FAFSA: the cost of attendance (COA) and the expected family contribution (EFC). A school’s COA is determined by the average cost of attending for a year. EFC is determined by how much an applicant and his/her parents are expected to contribute in one year of education. The government deducts students’ EFC from their COA to determine how much financial aid they need, and then might offer grants, work-study programs, subsidized loans, or Perkins loans accordingly.

Sources of Financial Aid

School Aid: There are some accredited medical billing and coding schools online with financial aid. These institutions may offer grants, scholarships, or assistantships, most of which are determined by FAFSA information. School aid is often available only in small amounts, so students usually need other forms of aid to supplement.
Federal Aid: Provided by the U.S. Department of Education, federal aid programs lend billions of dollars each year. FAFSA information determines how this aid is distributed. Federal aid includes grants, work-study programs, subsidized loans, and unsubsidized loans. Anyone with a Social Security number may apply for aid.
State Financial Aid: Many states offer financial aid through their own departments of education, which have smaller budgets than the federal government does. State loans have similar interest rates and repayment options to federal loans, but they are usually only available to students who are residing and attending school in the lending state. State aid is less available than federal aid.
Privately Funded Scholarships: Corporations, nonprofits, and schools may offer private scholarships. Nonprofits might provide a few hundred dollars for books, while large corporations might pay for an entire year of courses. Funding organizations have complete discretion over these scholarship requirements.

Types of Financial Aid

Scholarships: Scholarships are usually designed for particular student populations who have demonstrated academic excellence. They don’t have to be repaid, but they sometimes have specific requirements, such as recipients having to give a presentation or attend a specific program.
Grants: These government awards are usually distributed based on FAFSA information and focus on students who demonstrate financial need. Like scholarships, grants don’t have to be repaid.
Federal Loans: The federal government awards these loans based on FAFSA information, and they come in two forms: subsidized, which are limited to need-based undergraduates, and unsubsidized, which are not need based. Some programs even offer cancellation or forgiveness for federal loans. Any college student with a Social Security number can apply and qualify for a federal loan.
Private Loans: These loans come from banks and credit unions. They are subject to marketplace changes and usually come with higher interest rates than federal loans. Private loans are often harder to get and require borrowers to have either great credit or a cosigner.
Work Study: Work-study programs allow students to fund part of their education by working on or near campus. Work-study jobs are usually related to the recipient’s area of study.

Federal Grants

The U.S. Department of Education offers a variety of grants to help students pay for college. Students have to submit the FAFSA in order to qualify, and grant funds only need to be repaid if recipients stop qualifying for the grant. This generally occurs when grant recipients withdraw from college before the academic year ends.

Federal Pell Grants: These grants are for undergraduate students who have not yet finished a degree and are not currently incarcerated or on parole. The maximum award is $6,095.
Federal Supplemental Educational Opportunity Grants: These grants are also administered to undergraduate students by participating schools’ financial aid departments. This grant awards between $100 and $4,000.
TEACH Grants: Only available to students enrolled in education programs, these grants award up to $4,000 a year and require recipients to teach in specific kinds of schools.
Iraq and Afghanistan Service Grants: This grant is for students who do not qualify for the PELL and who lost a parent or guardian who served in one of the military conflicts following 9/11.

State Grants

Many states offer grants to students who are attending a school in-state. These funds are intended for students with financial need, but they are harder to earn than federal grants, due in part to their residential restrictions. Check the National Association of Student Financial Aid Administrators’ website for more information.

Finding Scholarships

Scholarships are generally aimed at specific populations, such as Native American students or those studying certain fields. Medical billing and coding scholarships are available from various funders and range in amounts. They don’t need to be repaid, making them one of the best options for financial aid.

Taking Out Loans to Pay for Your Medical Billing and Coding Degree

Scholarships may be the best choice for aspiring medical billing and coding students, but they might not cover all of their education expenses. Most students have to take out loans to supplement their other financial aid. More than 70% of students leave college with student loan debt. Students have two options for loans: federal and private. Federal loans come from the U.S. Department of Education, while private loans are from banks or other lenders.

What Kind of Loan Should You Take Out?

Students attending an accredited medical billing and coding school online with financial aid might still have to apply for loans, but it’s important to research first, because federal loans have lower interest rates and more generous repayment options than most private loans. Subsidized loans are available for undergraduates, and the government pays their interest while recipients are enrolled in school and for six months after they graduate. Unsubsidized loans don’t have this option, but recipients don’t have to start repaying them until after they graduate.

Private loans come from banks, credit unions, or other private lenders, and recipients often need high credit scores or a cosigner. These loans come with relatively high variable interest rates and strict repayment plans. Federal loans, on the other hand, have lower interest rates, and sometimes offer options for forgiveness or cancellation.

Loan Repayment

Federal student loans come with a few different repayment options, designed to make sure borrowers are able to pay them back in full. The standard repayment plan begins six months after graduation and assumes that borrowers can pay back their entire loan in 120 months.

For borrowers who take out larger loans or have low-paying jobs, the U.S. Department of Education offers an income-driven repayment plan. Under this plan, monthly payments depend on how much the recipient earns. The higher their income, the more borrowers are expected to pay each month.

Another option is a direct consolidation loan, in which student loans from all lenders combine into one larger loan, leaving borrowers with just one payment per month. These loans can end up costing more in the long run, as they accrue interest, but they can make repayment simpler and more manageable. Borrowers can use a free repayment estimator calculator to get an idea of what their loans will cost.

Loan Forgiveness

With federal loans, borrowers have several options for loan forgiveness. One loan forgiveness program focuses on public servants. Borrowers who put in 10 years of work for the government or a nonprofit are eligible to have the remainder of their federal student loans forgiven. They still have to make loan payments during their 10 years of work. Medical billing and coding graduates might have a relatively better chance with public service loan forgiveness programs, since many hospitals are nonprofit. However, loan forgiveness isn’t a sure thing, and borrowers should never assume they will receive it.

Financial Aid for Graduate Students

Graduate students have many of the same funding options as undergraduates, with the exception of unsubsidized federal loans. Some institutions offer teaching or research assistantships to graduate students, allowing them to work with professors while getting their degrees. Many employers and foundations also offer tuition assistance to students returning to college to obtain more advanced degrees in their field.

Universities and colleges with graduate programs often offer options to ease the burden of cost for their students, because graduates may perform research, publish studies, or present at conferences that boost the school’s public image. Many scholarships are also geared towards graduate students, especially those involved in research. Most of these scholarships come with the expectation that recipients will research and publish new findings, possibly thanks to their scholarship funding.

Scholarships for Medical Billing and Coding Students

American Health Information Management Association Merit Scholarships
Who Can Apply: AHIMA members currently enrolled with at least 24 credits earned and 6 remaining, and a 3.5 GPA.
Amount: $1,000 to $2,500

Georgia Health Information Management Association Scholarship
Who Can Apply: Georgia residents enrolled in an accredited health information management (HIM) program who are active in the organization and have a 3.5 GPA.
Amount: Undisclosed

Mary M. Zannis Scholarship
Who Can Apply: Residents of New York enrolled in HIM programs in the state with a 3.0 GPA. Must be members of the New York Health Information Management Association and have competed at least 12 credits.
Amount: $1,000

Association of Schools of Allied Health Professions Scholarship of Excellence
Who Can Apply: ASAHP members who have completed at least one term of study at any degree level.
Amount: $1,000

Houston Area Health Information Management Association Scholarship
Who Can Apply: HAHIMA members residing in the Houston area who are in their second year of an accredited HIM program.
Amount: Undisclosed

New Jersey Health Information Management Association Kathleen A. Frawley Scholarship
Who Can Apply: Members of AHIMA who are residents of or studying in New Jersey. Must have completed at least 12 credits and have a 3.0 undergrad or 3.5 graduate GPA.
Amount: $1,000

Sarah Bush Lincoln Volunteer Guild Scholarship
Who Can Apply: Illinois residents in an accredited program with a 3.5 GPA.
Amount: varies by year

Robert D. Kruse Memorial Scholarship Fund for Allied Health Professionals
Who Can Apply: Full-time students in their final year with a GPA of 2.5 or higher.
Amount: $5,000

Healthcare Information and Management Systems Society Foundation Scholarship
Who Can Apply: Organization members at any degree level. Undergraduates must be at least juniors.
Amount: $5,000

Richard P. Covert, Ph.D., LFHIMSS Scholarship for Management Systems
Who Can Apply: Healthcare Information and Management Systems Society (HIMSS) members at any degree level. Undergraduates must be at least juniors.
Amount: $5,000

HIMSS Steve Lieber Innovator Scholarship
Who Can Apply: HIMSS members who have shown a capacity for innovation in healthcare information management.
Amount: $5,000

Arizona Chapter of HIMSS Scholarship
Who Can Apply: HIMSS members in good standing who are attending an accredited Arizona institution.
Amount: $5,000

South Florida Chapter of HIMSS Scholarship
Who Can Apply: HIMSS South Florida chapter members in good standing.
Amount: $5,000

Virginia Chapter of HIMSS Scholarship
Who Can Apply: HIMSS members attending an accredited institution in Virginia.
Amount: $5,000

NYHIMA Returning Student Scholarship
Who Can Apply: NYHIMA members who are returning to school to advance their careers. Must have completed at least 12 credits and have a 3.0 GPA.
Amount: $1,000