Understanding State Financial Aid Programs

Posted: April 20, 2012 by

If you’re planning on enrolling in a college or career training program, you don’t have to try funding it alone; you may be eligible for a number of government financial aid programs. Not only does the U.S. government offer a variety of grants and student loans, but the individual states also offer various types of assistance. Here’s a brief overview to give you an understanding of state financial aid programs and how they work.

First of all, before you apply for state aid, go ahead and apply for federal financial as well, and do it first.  It’s free and fairly simple, and chances are the federal government will have more resources than your state will.  Besides, many states determine your eligibility for their financial aid based on the Free Application for Federal Student Aid (FAFSA), which you fill out to apply for government aid.  So go ahead and fill that out first, and see what comes of it; it may make things easier.  You may be eligible for both federal and state aid.

Every state is its own government, with different policies and programs available.  Generally speaking, the state where your school is located is the state where you’d apply for aid—and generally speaking, you’re more likely to get state funds if you go to school in the same state where you live.  (States like it when their residents stay and attend in-state schools.)  If you’re attending an official state college, it can also improve your chances for state aid.

To learn about a particular state’s financial aid programs, go to that state’s education department website.  The U.S. Department of Education has a detailed list with links to the state departments, which you can access through studentaid.ed.gov. Some states will go by your completed FAFSA to determine eligibility; some will ask you to fill out a separate application.  Many times, the state will coordinate directly with the financial aid department of the school you’re planning to attend, so you can access the state programs directly through the school’s financial aid department.  Each state is different, so educate yourself on your state’s particular process.

Types of financial aid offered by states are similar to what the federal government offers; Some financial aid is in the form of grants based on financial need, particular studies or other incentives. Other aid is in the form of student loans issued by the state.

Finally, in understanding state financial aid programs, be willing to “comparison shop,” especially if you’re dealing with student loans. You might be eligible for both federal and state loans, and you might not need all the money for which you’re eligible. Don’t just take every loan you’re offered; find out the interest rates and repayment terms offered by the state and federal governments, and take whichever loan(s) offer the lowest interest rates and best terms.