State Financial Aid for College: What to Know

Students taking advantage of state financial aid to pay for college in recent years received the highest average grant amounts since as far back as at least the 1970s.

In 2018-2019, states awarded an average of $930 per full-time-equivalent undergraduate student in the U.S., according to the College Board’s Trends in College Pricing and Student Aid 2020 report. This continues a seven-year trend of rising state grant aid. But as state budgets see significant cuts in response to the economic impact of the coronavirus pandemic, experts say the trend may pause or reverse.

Still, state financial aid programs can play a role in increasing college accessibility for students with financial need, supporting student groups such as adult learners and providing merit aid for students with strong academic backgrounds.

State Financial Aid vs. Federal Financial Aid

The financial aid offered by states varies widely by state, while all eligible students in the U.S. can apply for federal financial aid through the Free Application for Federal Student Aid, or FAFSA.

Many states use the FAFSA to determine eligibility for their financial aid programs, but some states have additional requirements and some offer a separate application for individuals who cannot submit a FAFSA, typically due to citizenship requirements.

While students have until June 30 — nearly two years after the FAFSA opens on Oct. 1 — to apply for federal financial aid, state deadlines to submit the FAFSA and be eligible for state aid are often much earlier.

[Read: FAFSA Deadlines You Should Know.]

“In California, we don’t have any additional questions for students who submit a FAFSA. If you submit a FAFSA by March 2, you will be considered for all of the state aid you are eligible for,” says Jake Brymner, director of government relations and external affairs at the California Student Aid Commission.

“The March 2 deadline is for those who are particularly seeking to enroll in a four-year college,” he says, noting that there is more flexibility for students who attend community college and other nonbaccalaureate programs.

Typical State Financial Aid Awards

While the average state grant awarded across the U.S. in 2018-2019 was $930, some states offered much more aid and some provided much less.

Montana, for example, offered the least state financial aid among all states in the U.S. that academic year, providing an average of $10 per full-time-equivalent undergraduate student. On the other end of the spectrum, Georgia offered the most state financial aid, providing $2,370 on average.

Each state distributes this money differently. Some states provide the aid directly to students while others distribute it indirectly through the colleges and universities.

State Grants, Scholarships, Loans and Tuition Waivers

States offer many different kinds of financial aid. The most common types of aid are need-based grants, but some states also offer merit-based grants, scholarships, educational loans and tuition waivers.

[Read: What to Know About Grants for College.]

The College Board reports that in 2018-2019, 26 states considered students’ financial circumstances in allocating at least 95% of their state grant aid, while 13 states plus Washington, D.C., weighed students’ financial circumstances when awarding less than half of their state grant aid.

But each state’s offerings are different. Meghan Flores, manager of the state grant programs at the Minnesota Office of Higher Education, encourages students to explore every available state resource and to contact an institution’s financial aid office, which can often provide information about state financial aid programs.

“Look at state resources that aren’t just the main financial aid program. We have a loan program for our state, we have a child care program for our state, we have an emergency assistance grant,” Flores says. “Work with the financial aid office. They are the direct resource, even for continuing students. You are the consumer buying a product. You can ask as many questions as you want.”

COVID-19 and State Financial Aid

The long-term effect of the coronavirus pandemic on state financial aid throughout the U.S. is uncertain, though experts say student financial aid typically is the last item to be cut in education budgetary discussions.

In the short term, some states have created grants and emergency assistance programs to support students and others affected by COVID-19, the disease caused by the novel coronavirus. Michigan, for example, created Futures for Frontliners, a scholarship program that provides free tuition to individuals who worked in essential industries during the state’s COVID-19 shutdown in spring 2020.

[Read: Coronavirus Emergency Financial Aid: What Students Should Know. ]

While some states may see more students competing for financial aid as families struggle to afford college amid circumstances like job loss, other states — like Colorado — are seeing fewer undergraduate students pursuing college degrees.

Angie Paccione, executive director of the Colorado Department of Higher Education, says the state has seen “a dip in enrollment” among undergraduates “because of COVID, or at least that’s what we attribute it to. This means students are not necessarily needing the financial aid if they are not applying.”

COVID-19 has led to more barriers to attending college, Flores says, but she encourages students to research financial aid options like state aid. “Don’t assume you can’t go to college because there’s a global pandemic.”

Trying to fund your education? Get tips and more in the U.S. News Paying for College center.

More from U.S. News

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