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The North Texas Daily recently highlighted an analysis concluded last year from a company called NerdWallet, an American personal financial website. NerdWallet concluded that high school graduates missed out on approximately $2.7 billion in Pell Grant funds in 2016 due to “incomplete or submitted” Free Applications for Federal Student Aid forms, known as FAFSA.
According to the FAFSA site, issues tend to arise with the true completion of these forms. Students and parents will take a half hour on average to complete the application, but may be unaware of the other work they must do to ensure the student is as informed as possible on how to get the most financial aid they can.
A 2016 study from the National College Access Network surveyed 150 low-income high school graduates between the ages of 17 and 20, and found half of them had not applied for any form of financial aid. Their data showed that the majority of these non-applicants were “misinformed or uninformed about what financial aid [was].”
Some education experts have even come out to say that some students become so discouraged with financial aid process that they never actually attempt to apply or go on the FAFSA website.
“Many high school graduates live without college from a lack of economic awareness, and many college students drop out from overwhelming loan debt,” according to the North Texas Daily article.
A recent story in the New York Times on loan forgiveness cited a Florida school teacher with $40,000 in student loans, an architect for the Navy with more than $100,000, and a Philadelphia pediatrician that owed more than $300,000. That’s a lot of money.
The average cost of college including tuition, fees, room and board is around $19,000 for an in-state public school, and $43,000 for private, as reported by College Board. This is an average price, for only one year of schooling.
This is not something we can avoid thinking about if we want to leave higher education with some money left in our pockets.
Here is what a student can do to increase their knowledge in federal aid assistance:
The Equation. According to HFG Wealth Management, to plan accurately for college costs, it’s best to
1) Identify the college the student is likely to attend and use those numbers;
2) Multiply the one-year cost by 4 (or even 5); and
3) Add an inflation factor. You cannot forget the inflation factor!
Timelines. Deadlines. A major part of a student’s financial aid package deals with grants, meaning that missing any deadline is completely off the table. There are no extensions or exceptions. Grants are usually awarded on a first come first served basis, and are awarded based on the overall completion of the required and requested information needed for the application.
The student must know the timeline of when specific universities/colleges FAFSA deadlines are. Many schools’ financial aid is distributed on a first-come, first-serve basis. Although the federal deadline on the form is June 30, individual schools can also set their own set deadlines as early as March. It’s also important to note that deadlines for state aid also vary.
Save the Trees; Online Forms. Because of the FAFSA’s complexity, it’s common for people to make mistakes when filling out the application. FAFSA’s site notes, that “paper applications with errors or missing information will be returned for corrections; therefore, their processing will be delayed.”
The online version of the form also issues an alert for missing information and even recognizes some obvious errors, which will definitely come in handy.
Compare and Contrast. According to Barry Fox, the President of Barry Fox College Finance, the most effective tool for appealing for FAFSA is to share a more robust financial aid offer from another school.
“I believe in sending in a letter, saying, ‘we got a better deal here, but we prefer to go to your school. Can you match or increase what we got here?’” he says.
“You go in there with evidence in hand.”
To try to receive a better aid package, one may also ask a FAFSA or Financial Aid Advisor to review the case at hand. Fox notes to try to avoid using the words “bargain” or “negotiate.” Counselors advise thanking the school for its generosity and then expressing doubt at being able to meet the family’s expected contribution as a way to ask for more aid.