Wall Street Journal: Case-Strapped States Cut College Financial Aid
Posted on Thu, Feb 02, 2012
JANUARY 29, 2012
Cash-Strapped States Cut College Financial Aid
Edited By CRISTINA LOUROSA-RICARDO
College financial-aid season has just kicked off, and experts say students seeking state grants
had better act fast.
At least six states, including Illinois, Kentucky and Tennessee, now have "until funds depleted"
policies on grants, meaning late filers risk getting nothing. Other states are shrinking the
application window. Oklahoma, for example, moved its grant-application deadline to March 1
this year, two weeks earlier than last year. Oregon's Feb. 1 deadline is the earliest of any state for the second year in a row.
"It's essentially a technique for reducing the number of students who qualify because not
everyone will [apply] on time," says Mark Kantrowitz, publisher of FinAid.org and FastWeb.com.
Thanks to growing budget deficits and rising demand for financial aid, states say they're running out of grant money earlier and earlier each year. Many cash-strapped states have cut student aid, while colleges have been raising tuition.
For some, acting quickly still won't be enough. Last year, New Hampshire announced it was
ending its grant support to college students because of state budget woes—making 2012-2013 the first year that residents can't apply for state aid. The cut also impacts Maine residents, who previously could use their state's grant when attending a New Hampshire college; Maine ended that practice after New Hampshire terminated its grant program. (Maine still offers its state grant for students attending college in its state and in five other states on the East Coast, including Connecticut, Massachusetts and Pennsylvania, as well as Washington, D.C.)
To increase their chance of receiving aid this year, parents should file the Free Application for
Federal Student Aid, or Fafsa, as soon as possible, says Rod Bugarin, a financial-aid consultant and former financial-aid officer at Brown and Columbia universities. Even parents in states with spring deadlines might want to consider filing soon since more states may run out of aid early, he says. Filing early also helps maximize the free aid students will get directly from colleges, advisers say.
Submitting the required paperwork in the next few weeks may be a challenge, especially for
families who have not yet filed their taxes. Rather than waiting, parents should consider filing
the Fafsa with estimates based on 2011 paystubs, bank account and brokerage statements,
and their 2010 tax return, says Mr. Kantrowitz.
You can make updates to the application later on. But parents should keep in mind that
revisions could impact the grant money students receive when school begins.
—AnnaMaria Andriotis, SmartMoney.com