The federal government is a top source of financial aid. According to the National Center for Education Statistics, 55% of all undergraduate students received federal financial aid.
However, some experts are concerned about the future of federal aid due to the recent changes to the U.S. Department of Education. If you’re a current college student or will be enrolling in your first semester soon, it may be wise to explore other financial aid options, including state-based financial aid.
State-Based Financial Aid
State-based financial aid can be an invaluable resource. Whether you’re ineligible for federal aid or want to limit your reliance on student loans, state-based aid programs can be useful tools. Depending on where you live, you may be eligible for one or more of the following financial aid programs:
State Grants and Scholarships
Grants and scholarships are gift aid, so they don’t have to be repaid. Your state can be a valuable source of gift aid; many states operate grant and scholarship programs for their residents. For example:
- Alaska Education Grant: In Alaska, students that enroll in a program at an eligible institution can qualify for $500 to $4,000 in grants per academic year. The grants are based on student financial need.
- Iowa Tuition Grant: The Iowa Tuition Grant provides Iowa residents with up to $8,500 to attend a qualifying school, and students can qualify for the award for up to two years.
- Tennessee Hope Scholarship: First-year Tennessee students enrolled with an eligible college or university may be eligible for a scholarship of up to $2,250 per semester.
State Work-Study Programs
Like federal work-study programs, state work-study programs allow students to get part-time jobs and put their earnings toward their education expenses. State work-study programs are less common than other aid programs, but states like Minnesota, Pennsylvania, Washington operate them.
Talk to your school financial aid office to find out if a work-study program is an option for you.
Tuition Exchange and Reciprocity Agreements
Typically, attending a public university as an in-state student is significantly cheaper than attending a private school or out-of-state public university. According to The College Board, the average cost of attendance at a four-year public school for an in-state student was $24,920 in 2024, while the cost for an out-of-state school was $44,090.
However, if you have your heart set on going to school in another state, there may be a solution: tuition exchange and reciprocity agreements. Some states have agreements with other states that allow students to enroll with a qualifying institution in a partnering state and pay the in-state rate. The National Association of Student Financial Aid Administrators maintains a database of tuition exchange and reciprocity agreements.
State Student Loans
Some states operate their own student loan programs. Different from federal loans and private loans offered by banks or credit unions, these loans typically have competitive rates and generous repayment terms. For example:
- New Jersey: In New Jersey, NJClass loans have lower rates than most federal student loans, and you can have a repayment term as long as 20 years.
- Texas: Unlike federal loans, which have strict annual and aggregate limits, Texas College Access Loans allow borrowers to take out loans for the total cost of attendance.
- Vermont: Vermont’s student loans have lower rates than some federal loans, and you can choose a loan term of either 10 or 15 years.
How to Find State-Based Aid
State-based aid can be an excellent way to supplement or replace federal financial aid. To find and apply for state financial aid, follow these steps:
- Visit state education agency: Your state education agency will have information about its public universities and financial aid programs available to residents.
- Fill out Free Application for Federal Student Aid (FAFSA) or state-specific applications: While the FAFSA is used to apply for federal aid, states and schools often use it to determine your eligibility for other aid, too. Filling it out ensures you can apply for other aid, including state-based programs. If you’re ineligible for the FAFSA, some states have separate financial aid applications, so check with your state education agency for specific requirements.
- Contact your college’s financial aid department: Your college’s financial aid office is a critical resource. If you’re having trouble finding financial aid, your financial aid office may be able to recommend sources or state financial programs that can help.
If federal and state-based aid isn’t enough to cover the total cost of attendance, private student loans may be a helpful option for covering the remaining balance. Explore your rate options with ELFI’s student loan calculator and check your rate online in minutes.
