Why the FAFSA is Important – Whether or Not You Need Financial Aid
Last Updated on August 7, 2023 by Jill Schwitzgebel
Each October 1st, the Free Application for Federal Student Aid (FAFSA) opens up for students who will be in college during the next academic year. Completing the FAFSA is important because every year, federal money for college gets left on the table, including grants that never need to be paid back. I strongly encourage every family to complete it, even if you believe that you are not likely to
In addition to the above, here are three other important reasons that completing the FAFSA is worth your time:
1. Circumstances Change
One thing we have all learned over the last few years is that financial situations can change unexpectedly. Your circumstances in October could be very different than in the following August, when that tuition bill is due. If you have completed the FAFSA, and your finances look different later, you can submit an update to the FAFSA and appeal to the Department of Education for more financial aid. Additionally, keep in mind that just because you did not qualify for any aid last year, does not mean that you will not qualify this year. Small tweaks to your financial situation, and to the FAFSA itself could make a difference.
2. Scholarships
Some private scholarships require completion of the FAFSA, regardless of whether you were granted federal financial aid grants. And, at many institutions, students must complete the FAFSA in order to receive merit scholarships awarded by the college itself. Don’t miss out on even more free money by not completing the FAFSA!
3. Loans and Work Study
I mentioned this briefly in the first paragraph. The loan protections via the federal student loan program are more favorable than those offered through private loan providers. Interest rates are lower, too. Beyond that, students that do not qualify for any other federal financial aid, can still qualify for the federal student loans, regardless of family income.
Completing the FAFSA is also necessary for parents to qualify for Parent Plus loans on behalf of their students. And finally, students also must complete the FAFSA to be deemed eligible for employment in work-study jobs on campus.
Bottom Line
The first letter in FAFSA stands for “Free.” So, there is nothing to lose by completing it, but much to be lost by failing to complete it. Yes, there is a time cost, but with the IRS data retrieval tool, it’s really pretty quick – around 20 minutes, once you’ve assembled your documentation. And, studies have shown that students that complete the form are actually more likely to follow through on their college plans than those who do not.
Finally, it is important to know that financial aid is mostly awarded “first come, first serve.” Aid is distributed on a rolling basis. So that means that for the best chance to receive generous financial aid, you’ll want to apply as close to October 1st as possible.
Check out A Guide to the Different Types of College Student Loans for more information about college student loans.
