State Financial Aid

Reimagine state financial aid to address the challenges faced by today’s students and the realities of the changing economy. Adjust state financial aid policies so that postsecondary credentials are within reach for more learners and workers who need them.

Recommendation 14

State Financial Aid

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It is an important time to look “under the hood” at state financial aid programs to ensure that they help all types of students and promote college completion through equitable and inclusive financial aid allocation and distribution. State financial aid programs keep the door to higher education open for many, often supplementing federal financial aid, which has lost its “buying power” in recent decades as Pell Grant values have failed to rise along with the cost of attending college. State aid also broadens the pool of financial aid recipients, filling in the gaps where federal financial aid does not apply.


JFF recommends that state financial aid programs support part-time students, not just full-time students. That is important for people who need to balance work and college. State aid should also support students participating in short-term credential programs of one year or less that align to industry demand. Many short-term credential programs are not eligible for federal financial aid, but the skills learners acquire in such programs are often important to employers and lead to high-wage jobs. Additionally, state aid should support adults who are working to attain a high school equivalency certificate while also pursuing a postsecondary credential—an approach proven to accelerate the progress adults make toward occupations that pay family-supporting wages.

Finally, states should offer financial aid that gives students incentives to complete their programs of study. There is emerging evidence that this type of aid—sometimes in the form of what are called “last mile” grants—encourages students to complete programs when they have exhausted their federal financial aid and are at risk of dropping out.