FAFSA Benefits You Don’t Want to Miss

Five dollars - you can save a lot of money if you take advantage of fafsa benefits

Flickr user pixi acid

Are you applying to college but have decided not to file the Free Application for Federal Student Aid (FAFSA)? Several surprising reports have stated that many families decide against filing the FAFSA. For many, it is because they have heard that the application is only for students from low-income families – this is not true at all.

Several different factors can go into determining student financial aid. Even students from more privileged backgrounds may qualify. By not filing this completely free application, you could be missing out on a lot of FAFSA benefits that could help lower the cost of your college education.

Here are the 6 most important benefits of filing the FAFSA. Given the high cost of college, you won’t want to miss out on any of these.

1. Federal Student Loans Have Lower Interest Rates

For many, even if they come from a more privileged background, loans are still needed to cover the cost of college for four years. Filing the FAFSA qualifies everyone who files for federal student loans and these have much lower rates of interest compared to private student loan interest rates.

 

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2. You May Be Eligible For Forgivable Student Loans

The Department of Education has a few programs that result in your federal student loans being forgiven. This includes the Public Service Loan Forgiveness Program. This one forgives the remaining balance on your direct loans. In general, joining the military, becoming a public school teacher in a low-income area, or working in public service, the government or a non-profit organization are some of the criteria to become eligible for forgiveness.

Also, recently, those with federal student loans under a certain income level have been granted up to $20,000 in student loan forgiveness. You won’t be experiencing these types of forgiveness levels from private loans.

3. It’s Required for Many Federal and State Scholarships, Grants, and Aid Programs

Many financial aid programs require students to file this application in order to award any type of institutional scholarship or grant. Many state agencies, for example, require you to complete your FAFSA in order to be eligible to be awarded state grants, federal aid, and scholarships.

4. You Could be Eligible for Institutional Aid

Many colleges and universities use the information on the FAFSA as a deciding factor for institutional aid, especially need-based aid. If you haven’t completed your FAFSA, your school won’t have the information it needs to send you a financial aid package, which could include grants.

Colleges have limited funds that they allocate to students based on several different factors. And in some cases, the FAFSA could also be the deciding factor for merit-based scholarships through the school. They require the application to ensure the student has first maximized their federal aid.

5. It May Be Needed for Other Scholarship and Grant Qualification

Agencies, communities, businesses, and more will often have scholarships and grants available for college students. However, for some, the FAFSA will be required to enter the running, especially if one of the qualifications is proven financial need. Additionally, students or parents from select states (IA, MN, MS, NJ, NY, PA, VT) are able to transfer their FAFSA information directly into a state aid application.

6. Filing Early Brings its Own Benefits

Completing the FAFSA is one thing and has the five benefits listed above, but completing it early is also beneficial! It becomes available each year on October 1st, and while technically the deadline is the last day of the award year, you don’t want to wait until then to complete yours.

Some forms of financial aid, such as federal grants and institutional grants and aid, can run out. While federal loans won’t disappear and you’ll always receive those offers, you could very well miss out on some money that won’t need to be repaid if you wait!

Also, it’s important to note that while the deadline for FAFSA may be in the far future, many schools and organizations require you to complete yours earlier in order to even be eligible for their financial aid packages. If you delay, even a few months, you could find out your potential schools’ FAFSA deadlines have already passed.

It really is a good idea to start your FAFSA on October 1st or shortly after in order to reap the full benefits!

Even if you think you won’t qualify for any financial aid from the federal government or your school, it’s still a good idea to complete your FAFSA. You might be pleasantly surprised by what you’re offered! And it may be a requirement for some merit-based scholarships and grants. And it won’t take as long as it used to! The FAFSA is getting some serious updates for the 2023 – 2024 award year. You really have no reason not to complete it.

Financial aid packages from colleges can be confusing. However, our Financial Aid Offer Comparison tool can help cut through the confusion and make it easier than ever to understand what you’re being offered. Check it out today to ensure you’re getting a great deal on college!

And our helpful question-by-question FAFSA guide can help you through it!

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