There are four main sources of financial aid:
- U.S. government
- Individual states
- Private organizations
- Your college or university
All can offer a helping hand when it comes to paying for college , but oftentimes, the federal government and individual states are the most robust financial aid resources, especially for students attending public colleges that may not have huge endowments to help subsidize tuition and housing expenses.
For students, the major difference between federal and state financial aid is that the federal government offers a standardized set of awards and has an equally standardized application procedure for getting them, whereas states can dramatically vary in terms of what kinds of awards they offer, eligibility requirements, application procedures and deadlines.
To apply for federal grants, loans and work-study programs, complete the Free Application for Student Aid at www.fafsa.ed.gov. To be eligible for federal aid, all students must be U.S. citizens or eligible noncitizens, have a valid Social Security number and be attending an accredited education program at least half time.
According to the National Association of Student Financial Aid Administrators, nearly every state offers at least one grant or scholarship program to residents and some extend the offer to students simply attending school in that state. You can check out what's available in your state on the NASFAA website.
In addition to grants, states may offer fellowships, specialized loan programs, state tax incentives, tuition exchange programs or tuition reduction benefits, some of which are more generous than federal aid awards. Georgia's HOPE Scholarship Program, for example, covers all or a large portion of the cost of tuition at any public college (or a smaller portion of tuition costs at pricier private institutions) for residents with a 3.0 GPA or above for up to 127 semester (or 190 quarter) credit hours. California's CalGrant program offers qualified residents nearly $12,200 per year that can be applied to tuition, housing or books costs. Unlike federal programs that allow students to submit one application for most aid awards, state initiatives may each require a separate application and may also require students to file for federal financial aid before applying for state aid.
Your state's higher education board will have information on what awards are available in your area and application procedures, but your closest 529 plan may also offer separate tax incentives. Many 529 prepaid and college savings plans offer lucrative tax deductions, credits or matching grant programs for families who open an account in that state.
Also check out tuition exchange and reciprocation agreements. Many states maintain agreements with nearby states that allow students to attend school across the border without incurring full out-of-state costs. There are currently four main statewide reciprocity programs:
- Tuition Break for New England residents
- Midwestern Higher Education Compact for the Midwest
- Academic Common Market for Southern states
- Western Undergraduate Exchange for the Western region, including Alaska and Hawaii
Several states, however, also maintain independent contracts with border states.
1. About Cal Grants Overview, California Student Aid Commission, http://www.calgrants.org/index.cfm?navId=10
2. Academic Common Market, Southern Regional Education Board, http://www.sreb.org/page/1304/academic_common_market.html
3. Basic Eligibility Criteria, Federal Student Aid, U.S. Department of Education, https://studentaid.ed.gov/eligibility/basic-criteria
4. Georgia's HOPE Scholarship Program Overview, https://secure.gacollege411.org/Financial_Aid_Planning/HOPE_Program/Georgia_s_HOPE_Scholarship_Program_Overview.aspx
5. Midwestern Higher Education Compact, http://www.mhec.org
6. RSP Tuition Break, New England Board of Higher Education, http://www.nebhe.org/programs-overview/rsp-tuition-break/overview/
7. State Financial Aid Programs, NASFAA, http://www.nasfaa.org/students/State_Financial_Aid_Programs.aspx
8. Subsidized and Unsubsidized Loans, Federal Student Aid, U.S. Department of Education, https://studentaid.ed.gov/types/loans/subsidized-unsubsidized
9. Western Undergraduate Exchange, Western Interstate Commission for Higher Education, http://www.wiche.edu/wue