Starting October 1, current and prospective college students will be able to complete the free state tuition application, also known as FAFSA, for their $ 150 billion portion of state tuition (including grants, scholarships, loans, and student traineeships) for the 2022 school year -2023.
Every year college finance experts urge students and their families to complete the FAFSA as soon as possible, as schools often distribute student aid funds on a first-come-first-serve basis, in the order in which students complete the grant applications. And every year students miss billions.
“October 1 is incredibly important when it comes to college funding as FAFSA is the gateway to $ 150 billion in higher education grants, including scholarships, grants, dual study programs, and federal student loans,” said Ashley Boucher, who recently was Director of Corporate Communications for Sallie Mae. “But some of that aid is limited, some of it is first come, first served, so families want to be among the first to apply for their fair share of aid, and that means preparing for that October 1st application deadline.”
In the past year, the FAFSA applications decreased – although the financial requirements have increased.
Discover Student Loans surveyed 1,500 parents with college students in early March 2020 and again in May 2020. They found that 48% of parents lost incomes due to the pandemic and 44% said they couldn’t afford to pay for their child’s education as much as they originally planned. As a result, by May, 39% of those who did not plan to apply for federal aid in March agreed to do so.
In the 2020-2021 academic year, only 68% of students and their families submitted the FAFSA, up from 77% in the 2018-2019 academic year and 71% in the 2019-2020 academic year. Last year is the lowest percentage Sallie Mae has ever seen since the organization published its How America Pays for College report in 2008.
Below-average graduation rates can be observed among a large number of students. According to the Sallie Maes report, 67% of low-income families, 70% of middle-income families, and 66% of high-income families submitted the FAFSA.
Boucher says the decline is “incredibly alarming” and “rooted in untruths”.
The most common reason families failed to submit the form was because they believed they were not eligible for financial assistance. However, there is no official income limit for applying for federal study grants.
Typically, “help is available to anyone with a household income of less than $ 250,000 a year,” Charlie Javice, founder and CEO of Frank, an online FAFSA platform, previously told CNBC Make It So with FAFSA season approaching, it’s really important that people remember that it’s not too rich to report FAFSA. “
Javice points out that the vast majority of Americans make less than $ 250,000. Being too rich “affects less than 5% of the US population. Everyone should do it.”
“Many families are still facing economic challenges as a result of a pandemic, and we want more families to keep their money in their wallets and not pay more for college than they have to,” added Boucher. “Of course that means starting with FAFSA, but it doesn’t end there.”
Of course, students can also reduce their tuition costs by taking advantage of their first funding offer.
According to the Sallie Mae report, 29% of families who received an offer of financial help from their school asked for more help and 71% of those requests were approved, resulting in higher grants in most cases.
Other common reasons students named Sallie Mae for not taking FAFSA were because they missed the deadline, found the application too complicated, and didn’t have enough time.
A recent survey of 1,000 college students conducted by Student Loan Hero found that 85% of students are unaware that the FAFSA determines eligibility for free grants such as scholarships and dual study in addition to loans, and 41% do not know submission to the FAFSA early on increases their chances of further financial help.
“These misunderstandings could lead some students to completely ignore FAFSA – one in five said they don’t intend to submit it this year. It’s a good idea for all students to submit the FAFSA as it has no income limit and cannot be used solely for federal aid, “says Rebecca Safier, student loan advisor at Student Loan Hero.
“One of the most dangerous misconceptions we discovered was that 43% of students believe that they must accept the full amount of student loan that they are entitled to. You don’t have to accept all (or any) of the student loans that you’ve been offered and should actually try to keep your borrowing as low as possible so you don’t end up with onerous debt after you graduate. “
Thanks to recent updates, the FAFSA application can be completed in just four minutes, and CNBC Make It’s step-by-step guide on how to complete the FAFSA can walk you through the process.
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