18 Nov Has Your State Changed Its Financial Aid Program?

One huge component of college financial aid packages is federal financial aid, but most states also have financial aid programs available as well. These are designed to motivate students to attend college in their home state and to provide the opportunity for students with financial need to afford a higher education. The Education Commission of the States (ECS) recently surveyed actions from the 2013 and 2014 legislative sessions and published their findings in a report entitled, “Trends in State Financial Aid.”

Their research found that states provided about $11.2 billion in college financial aid during the 2012-13 academic year. Major trends identified in the study include changes to various need-based and merit-based programs, linking financial aid programs to workforce demands to spur employment in certain industries, and state programs that are more focused on encouraging a transfer student pathway. Other key points from this report include:

• At least four states have enacted programs which play a larger role in college student loan repayment assistance or forgiveness programs. Connecticut, New Mexico, Indiana and Mississippi passed legislation which links loan repayment assistance or forgiveness to an agreement to work in specific high-need fields such as teaching and medicine, and meet certain service requirements.

• States are becoming increasingly aware of the increased costs of a college education, with five appointing commissions to research affordability issues.

• At least 10 states created or made changes to their existing need-based programs including Maryland’s First Scholarship Program, South Dakota’s first needs-based aid program, the District of Columbia’s Promise Establishment Act of 2014, Tennessee’s Promise Scholarship Act of 2014, and expansion of the definition of “need” to include more middle-class students in both New Mexico and California.

• Several states passed initiatives that use financial aid programs to meet workforce demands through grants and scholarships, Michigan, for example, established a grant program for minority students enrolled in medical programs who accept a work assignment within the state, while South Dakota started a program to grant scholarships to students who agree to teach there for five years. West Virginia has a similar scholarship program for nursing students willing to remain in their state.

Although some of these programs do not take effect for some time, and they are also subject to change, it is always a good idea to be aware of the financial aid picture in your state, particularly if you are thinking of entering any of the targeted professions. As with any form of college financial aid, the first step is the completion of the Free Application for Federal Student Aid (FAFSA), since most states also base their financial aid decisions on this information.

To find out about the college financial aid programs available in your state, talk to a professional College Financial Aid Advisor who can help make sure you understand all of the options and opportunities that are available to you. Contact College Financial Aid Advisors (CFAA) or visit my About.com website, Paying for College, for more information.