How to Qualify for Student Loans Out of State
If you're going to an out-of-state college or university, costs will be substantially higher than at an in-state school. However, your student loans are based on the disparity between your income/assets and the cost of your tuition, not on the cost of what your tuition might have been at an in-state school.
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Instructions
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Fill out the Free Application for Federal Student Aid. This is the benchmark document that the federal government looks at when determining your aid qualification; many scholarships and state aid agencies also ask to see your FAFSA, because it is so comprehensive.
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Find your school's code on the FAFSA website and indicate the code on your FAFSA. Your FAFSA results will be forwarded to the school, which will then offer you aid based on the income and assets of you and your family as they relate to out-of-state tuition. Federal aid will most likely be offered in the form of Stafford loans (subsidized or unsubsidized) to students and PLUS loans to parents.
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Apply for scholarships offered by your school. A list will be available through the admissions office. Search for those that target out-of-state students, as well as those that target some specific niche of your demographic, such as women, journalism majors, Native Americans or students over a certain age).
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Open a 529 savings plan, an education savings plan with tax benefits. The earlier you open a 529 savings plan, the more likely you are to contribute cash into it, but if you're a few months away from entering college, don't worry -- it's not too late.
Money in your 529 savings plan can be spent on tuition, books and other educational expenses tax-free, regardless of how long the cash has been in the 529 account. If you open it a few months before school starts, you're less likely to be able to put a lot of cash into the 529 ... but the tax benefit will still be there.
Although the 529 plan is administered by your home state, the funds can be used at an accredited school in any state.
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Ensure your 529 plan is in a parent's name if you're unmarried and under age 22. Federal officials will calculate what's called an "expected family contribution," or EFC, when they review your FAFSA. A parent's money, defined as money held in accounts that bear a parent's name, has a lower EFC than your own money, defined as money held in accounts that bear your own name. Therefore, putting your college savings in a parent's name means your EFC is lower, which makes you eligible to receive more financial aid.
You might still choose to pay in cash, if you can, rather than taking loans .... but at least you're eligible for more aid, if you choose to accept it. This can be helpful if the amount that the federal aid officers calculate as the amount you'll need for school turns out to be less than the amount you actually need.
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Look at your home state's department of education website for programs that will help cover the difference between in-state and out-of-state tuition. The D.C. Tuition Grant, for example, pays the difference between in-state and out-of-state tuition for D.C. residents.
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Tips & Warnings
If you're married or over age 22, don't worry about keeping your college savings in a parent's name ... once you cross either of those thresholds, federal officials start calculating EFC based on your own personal income, not your parents'.
Ensure you use a 528 college savings plan rather than a 529 prepaid tuition plan, because 529 prepaid tuition plans can only be used in your home state (not out-of-state).
References
Resources
- Photo Credit student image by dinostock from Fotolia.com
