Every year, college funding experts plead with students and their families to complete the FAFSA as soon as possible, as schools often distribute student aid funds on a first-come, first-served basis, in the order in which students complete applications for financial aid. And every year, students miss billions.
“October 1 is extremely important for paying for college education, as the FAFSA is the gateway to $ 150 billion in aid to help pay for college education, including scholarships, grants, work-study programs. – studies and federal student loans, ”said Ashley Boucher, who most recently served as director of corporate communications for Sallie Mae. “But some of that help is limited, some of it is first come, first served, so families want to be among the first to ask for their fair share of help and that means preparing for that October 1 application date.” . . “
Last year FAFSA applications fell, even as financial needs increased.
Discover Student Loans surveyed 1,500 parents of teenage boys in college in early March 2020 and again in May 2020. They found that 48% of parents had lost income due to the pandemic, and 44% said that they couldn’t afford to pay as much for their child’s education as they had originally planned. As a result, 39% of those who had no intention of seeking federal aid in March, in May, said they would.
Below normal completion rates can be observed among a wide range of students. According to Sallie Mae’s report, 67% of low-income families, 70% of middle-income families, and 66% of high-income families have submitted to the FAFSA.
Boucher says the decrease is “incredibly alarming” and “based on lies.”
The most common reason given by families for not submitting the form was that they did not think they would be eligible for financial assistance. But, there is no official income threshold for applying for federal student aid.
Typically, “help is available to anyone with a household income of less than $ 250,000 per year,” Charlie Javice, founder and CEO of Frank, an online FAFSA platform, told CNBC Make. It. “So it is very important as the FAFSA season approaches that people remember that there is nothing like being too rich to file FAFSA. “
Javice points out that a large majority of Americans earn less than $ 250,000. Being too rich “only applies to less than 5% of the American population. Everyone should do it. “
“Many families are still grappling with economic challenges due to a pandemic and we want to see more families keep their money in their wallets and not pay more for college than they have to,” adds Boucher. . “Of course that means starting with the FAFSA, but it doesn’t end there. “
Certainly, students can also lower their tuition fees by appealing their first offer of financial aid.
According to Sallie Mae’s report, 29% of families who received an offer of financial aid from their school requested more help and 71% of those appeals were approved, leading to higher grant amounts in most cases.
Other common reasons students gave Sallie Mae for not completing the FAFSA were because they missed the deadline, found the application too complicated, and didn’t have enough time.
A recent survey of 1,000 undergraduates by Student Loan Hero found that 85% of students are unaware that the FAFSA determines eligibility for free aid like scholarships and education in addition to loans and 41% don’t know that filing the FAFSA early increases their chances of getting more financial aid.
“These misconceptions could cause some students to ignore the FAFSA altogether – one in five said they don’t plan to submit it this year. It’s a good idea for all students to submit to the FAFSA because it has no income threshold and can be used for more than just federal aid, ”says Rebecca Safier, Student Loan Advisor for Student Loan Hero.
“One of the most dangerous misconceptions we discovered was that 43% of students think you have to take the full amount of the student loan you qualify for. You don’t need to take all (or none) of the student loans you’re offered, and in fact should try to minimize borrowing as much as possible so you don’t end up with heavy debt after graduation. .
With recent updates, the FAFSA application can be completed in as little as four minutes, and CNBC’s Make It Step-by-Step Guide to Completing the FAFSA can help you through the process.