When to apply for FAFSA for more college financial aid

Why is the best time to apply for college financial aid now

Whether it’s belt-tightening or the promise of federal student loan forgiveness, families are suddenly paying more attention to college financial aid.

More than half of parents who have college students, or 58%, did not plan to apply for federal aid, but have now changed their minds, according to a new report from Discover Student Loans.

“Given the uncertainty in the economy now around inflation and fears of a recession, it is understandable that some families are feeling the impact of paying college and reconsidering applying for federal aid,” said Rich Finn, vice president of Discover Student Loans.

This is where the Free Application for Federal Student Aid comes in.

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With tuition fees on the rise, most families rely on a range of resources to make college more affordable. Income and savings cover more than half of college costs, free money from scholarships and grants accounts for nearly a quarter of costs, and student loans make up most of the rest, according to Sally May’s annual How America Pays for College Report.

“You want to maximize this free money first,” said Rick Castellano, a spokesperson for Sally May, “before you borrow.”

But students must fill out the FAFSA to access any help. For the 2023-2024 school year, the FAFSA registration season opens on October 1 – and the sooner a student file is, the better.

The earlier families fill out the FAFSA, Castellano said, the better their chances of receiving help, since some financial aid is awarded on a first-come-first-served basis, or from programs with limited funding.

Scholarships are the key to undergraduate affordability

Miljan Sivkovic | istock | Getty Images

“The FAFSA is the most important thing you can do to qualify for scholarships and grants,” Castellano said. “Ultimately, this is free money that you don’t need to pay and that should help make college more affordable.”

Scholarships are a major source of funding, yet only 60% of families use them, according to the Education Lending Foundation.

About 6 out of 10 who used scholarships got them directly from their students’ school. These students received an average of $6,335.

The majority of families who did not use the scholarships said it was because they never applied.

Why don’t more families fill in the FAFSA

Last year, 70% of families completed the FAFSA test, up slightly from 68% the year before, a record low, according to Sally May. This year, up to 72% may apply, the discovery estimated.

“I always hope that more families will complete the FAFSA,” Castellano said.

Sally May found that the most common reason among those who did not apply was that they thought their income was too high to get help, and then charged that the application was too complex or they simply didn’t know it.

Indeed, “Almost every family would be eligible for some form of college aid,” Castellano said.

Many factors, not just income, determine how much assistance students receive, including the total number of people in the family and the number of children in college, as well as other financial obligations such as a home purchase loan or child support payments.

Families say the application process itself is another hurdle.

However, experts say you can complete the FAFSA form online at fafsa.gov or on the myStudentAid application in less than an hour, especially if you have your papers, including W-2s and last year’s tax return, on hand. Sallie Mae also has a free online FAFSA tool to help families navigate the process.

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