4 Need-to-Know Facts About State Aid for College

With the rising cost of tuition, more students and their families are relying on grants to pay for college.

The College Board's 2016 Trends in Higher Education report found that undergraduate students received an average of $14,460 in financial aid during the 2015-2016 school year -- which includes $8,390 in grants from all sources. That translates to grants constituting more than half of aid.

While federal and institutional grants represent a significant source of funding, state grants are another important funding resource for students.

"I've definitely seen families that haven't received much in the way of the federal Pell Grant who received a larger award through the state," says Blaine Blontz, a financial consultant at Financial Aid Coach who advises parents and grad students on how to maximize financial aid awards. "The amount can be from a few hundred dollars to the $5,000 range."

But applying for state aid isn't on the radar for most families, experts say, and the application procedure for grants varies among states.

Learn how to read a [financial aid award letter.]

For families with a college-bound student, here are need-to-know facts about state aid.

1. Each state has its own process for distributing funds. In most cases, college advising experts say, the Free Application for Federal Student Aid -- known as the FAFSA -- is the only thing required in applying for state aid. The FAFSA is used to determine most financial aid awards, and for the most part, relies on parental information unless the student is applying for grad school.

But some states require families to complete a separate state aid application form in addition to the FAFSA, Blontz says.

In Pennsylvania, for example, families who are interested in state aid have to submit the Pennsylvania State Grant Form.

2. State aid deadlines are usually earlier than the federal student aid deadline. "Federal financial aid has very generous deadlines, but states often have deadlines that are several months prior -- they're usually earlier than federal deadlines," says Kathy Ruby, director of college finance at College Coach.

The online FAFSA application deadline for the federal deadline is midnight Central time on June 30. But most states require the form sooner -- especially with the earlier release of the FAFSA on Oct. 1 this year.

According to the Department of Education's records, 10 states -- Alaska, Illinois, Kentucky, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, Vermont and Washington -- changed their deadline this year for most grants to: "As soon as possible after October 1, 2016. Awards made until funds are depleted."

Blontz from Financial Aid Coach says that with the FAFSA using a different base tax year, which eliminates the need for most estimates, families shouldn't wait too long to fill out the form.

Explore [10 shattered myths about financial aid.]

Even states that are not listed as soon as possible after Oct. 1, recommend families submit applications early.

"The earlier you apply, the better your chances even if you're a stellar student. Usually, it's first come, first serve," says Maria C. Torres, director of communications and outreach at the Maryland Higher Education Commission. The priority deadline for state aid in Maryland is March 1.

3. Most states offer need-based aid, although some offer merit-based scholarships, too. "Most states usually offer both," says Ruby from College Coach. "Understand if your state offers any merit-based aid to students, and that's something to research when your student is in the ninth grade."

Georgia is one state that offers several merit-based programs for "outstanding pupils" under its HOPE Programs. Florida is another example with its Bright Futures Scholarship Program, which awards grants to high-achieving Florida high school graduates.

Experts say the purpose of these programs is to help students become college ready.

Explore the colleges where [merit aid is most common.]

But there are some states that only offer need-based grants, such as Texas.

"Our state programs are need-based, but some of them are need-based with merit," says Chad Puls, deputy assistant commissioner for student financial aid programs at the Texas Higher Education Coordinating Board.

4. Most state grants can only be used at an in-state college or university -- public or private. "There are some states that do reciprocal grants and those are usually going to be those nearby the geographical region of the primary state of the family," the Financial Aid Coach adviser says. "Those grants are often much reduced from what received from the state of residence."

Torres from Maryland's education commission says grants distributed in her state are usually only for Maryland schools -- public or private. Although, she says, Maryland does offer reciprocity under certain circumstances, such as if the academic program isn't available in the state.

The general rule, experts say, is most states don't allow grants to be used in other states.

"They want to spend money on people who are staying in their state," Ruby says.

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

Farran Powell is an education reporter at U.S. News, covering paying for college and graduate school. You can follow her on Twitter or email her at fpowell@usnews.com.