Think You Don’t Qualify for Financial Aid, Think Again!
The Free Application for Federal Student Aid (known as FAFSA) for the 2019-20 school year became available on October 1. The purpose of financial aid is to help bridge the gap between the cost of attending college and the amount that students and their parents can afford to pay. Unfortunately, many students forgo applying for financial aid because they assume they won’t qualify or it’s too time consuming. The form costs nothing to fill out, and it could be well worth the time spent if it helps pay for the growing cost of college.
Don’t leave free money on the table
By some estimates, as many as one million students last year failed to claim a Pell Grant of up to $6,095 by simply failing to file the FAFSA to verify their eligibility in the first place. Since this is a grant and not a loan, it doesn’t even need to be paid back! Nearly 50% of those who were eligible but didn’t file, incorrectly assumed they would not be eligible when they actually were! It's true that the higher your family's income is, the lower your chances of receiving this type of federal grant. According to the College Board, 80% of Pell Grant recipients (dependent students) came from families with incomes below $40,000 in 2015-16.
Beyond the Pell Grant, a number of other non-Federal grants (from states, private entities, and colleges themselves) may also be determined through the FAFSA, even including for some high-income students. Some merit-based scholarships offered by colleges and universities also require applicants to file the FAFSA (or, if your college instructs you, the CSS/Financial Aid PROFILE form) even if the award itself is ultimately merit-based and not financially based.
The earliest date to submit the Free Application for Federal Student Aid (FAFSA) is October 1 prior to the start of the academic year, although the deadline is June 30 of the next calendar year. However, many colleges establish preferential filing deadlines for maximum consideration. A later application may still result in the award of some financial aid, but an earlier application will likely reap greater benefits. Colleges have different guidelines, so be sure to confirm the procedures with the schools to which you are applying.
Completing the FAFSA form is much easier
Many helpful resources for filling out the FAFSA are available; college financial aid offices or the student’s high school counselor should be able to point you in the right direction. You can even complete the FAFSA online, with real-time chat access to representatives. And check out Fastweb’s “Five-Minute FAFSA” video on YouTube, which takes a lighthearted approach to tackling financial aid paperwork.
As an additional benefit, students and parents will report income from an earlier tax year on the FAFSA, eliminating the pressure to file taxes as quickly as possible on the prior year’s income. For example, on the form for 2019–2020 aid, reporting will be for 2017 income. Many users will be able to pull in their family's tax information directly from the IRS using the IRS Data Retrieval Tool. The benefit of using this tool is that data is transferred directly from the IRS and automatically populates the form, which saves time and ensures greater reporting accuracy. In the time it takes you to watch your favorite 30-minute sitcom (without fast forwarding through the commercials), you can find money to pay for college. Even if the student wasn’t eligible in the past, you should apply every year to see if the outcome might improve!
Presented by Carl Holubowich, CFP®