How and why to maximize state funding for college
If your child is heading to college, you鈥檝e probably heard how important it is to submit聽your (FAFSA) form early. That advice is valuable when it comes to聽securing federal aid, but there are other聽key聽steps you can take to聽help your child nail down more financial aid from the state in which your child will be attending school.
Federal and state aid
College students may be eligible for two types of need-based financial aid: federal and state aid. In almost all cases, both types are awarded based on the FAFSA and how much the family will be able to contribute toward the child鈥檚 education expenses.
The federal government provides more than $150 billion in grants, loans and work-study funds each year to more than . To clarify the types of聽, a grant is money that doesn鈥檛 need to be paid back, while any loan 鈥斅爓hether it鈥檚 subsidized or unsubsidized, a Perkins loan or Parent PLUS loan 鈥斅爉ust be repaid. Students earn work-study funds by holding on-campus jobs. Many students receive some sort of financial aid in the form of loans, grants, work-study and scholarships. Far fewer receive Pell Grant money, which provides college dollars for those with low expected family contributions (EFCs) 鈥� below $5,198 in 2016 鈥� indicating that the family has a low adjusted gross income and/or a lot of children.
The federal government also provides each state funds to administer to students with financial need through the (FSEOG). This federal aid is awarded by the college your student attends, and because it鈥檚聽in the form of a grant, it doesn鈥檛 need to be paid back. The FSEOG doesn鈥檛 require residency and can be for both public and private universities.
Some states also have their own need-based grants, which students can receive in addition聽to federal aid. Each state calls these grants something different and may have different eligibility rules and application requirements. State grants may require residency and may be restricted to students at public schools. If your child does not qualify for these state need-based grants, you may want to look into merit-based aid opportunities. This type of aid isn鈥檛 awarded based on family finances and varies by school and state.
No matter the type of aid, it鈥檚 better to submit your application early.聽The 2016-17 is June 30, 2017. You can learn more about federal aid and file your FAFSA form at . States and colleges might have their own, earlier FAFSA deadlines. And if you need to submit any additional paperwork to qualify for FSEOG, you鈥檒l want to submit it as early as possible. State funds are more limited than federal aid and tend to run out early in the award year.
How to maximize state aid
Each college can聽require different steps for students who want to qualify for FSEOG need-based awards. But聽the following tips apply to every school:
- Make sure your child has formally enrolled at his or her聽college of choice.
- Call the college鈥檚 financial aid department and get to know the counselors there. Write down their names and contact information for future reference.
- Have your child聽set up and check his or her college-issued email account regularly. Some colleges use these for key communications as soon as students are enrolled.
- Have your child enroll in the electronic system the college uses to post financial aid status,聽and聽check it聽regularly to see if you鈥檙e missing any documents. Requirements are very school-specific. Ask the college聽if you have any questions.
- Make sure the college has your FAFSA on file. Clear up any problems as quickly as possible.
- Do your taxes as early as possible in the tax season. If you have investments and won鈥檛 have all the documents you need to file until March, ask the college if you can verify your income with current-year W-2s. And be sure to let the school know if you plan to file a tax extension request 鈥� again, your current-year W-2s will be used to determine eligibility.
- Submit your tax return to the college as soon as possible using the . You鈥檒l need to do this in both your FAFSA online account and your child鈥檚.
- Ask聽to receive financial aid documents via email or fax. You should also聽email聽or fax your responses, rather than mailing them, to speed up response times. It鈥檚 probably worth the cost to scan or fax at an office supply store聽if you can鈥檛 access the technology at work or home.
- Find out the college鈥檚 priority date for financial aid if it鈥檚 not readily available on its聽website. It鈥檒l be different from the application date and enrollment date.聽Then beat the deadline if you can.
The early bird gets the worm
If you don鈥檛 submit聽all of the documents required for state aid 鈥� such as residency forms and acceptance documents 鈥� by the priority date, your student will probably not receive state need-based grants. You鈥檒l have to try again next year.
Complete action items as early as you can, even if you aren鈥檛 sure your child will qualify for state need-based funds. This will help ensure that your student ends up with the greatest amount of financial aid possible.
Good luck in this worthwhile effort; before you know it, you鈥檒l be paying the matriculation fee in preparation for your child鈥檚 college graduation!
聽is a certified financial planner and fee-only investment advisor with in Aiken, South Carolina. This article first appeared at . Learn more about Kathryn on NerdWallet鈥檚 .
