Every year, around 20 million people go to college in the US. And every year, millions of students are forced to figure out how to pay for it. But, according to a new study, people might be missing out on a critical step.
All college bound students can apply for the $150 billion in federal student aid (that includes grants, loans, and work-study). To be eligible, students need to complete the Free Application for Federal Student Aid, better known as FAFSA.
Well, Sallie Mae recently polled 2,000 undergraduate students and parents to see if they filled out the FAFSA. And, according to their analysis, only 25% of people completed it the first month it was open and only 77% of people completed it all. It’s a decision that some estimate means that students are missing out on $2.6 billion in free FAFSA college aid.
You’re probably scratching your head right about now, thinking, how could that be true? Student loan debt is a massive problem in this country. The cost of college is ballooning. Why are people leaving cash on the table? After all, federal student loans have low interest rates, and federal grants don’t need to be repaid at all.
According to those polled, it’s complicated. 40% of those polled said they didn’t think they would qualify. Of note, that’s a misconception, considering that most families who make less than $250,000 qualify for some aid.
Another reason cited is that they missed the deadline. Others said the application was too complicated, they didn’t have time, or they didn’t have the information to complete form. Lastly, some people didn’t even know about the FAFSA.
Let’s take a step back: Student loan debt is a $1.5 trillion problem, and yet some people are not taking advantage of filling out a form that could help.
Do your part, and make sure every college student you know, knows the value of the FAFSA. It might be the most valuable financial lesson you can give.
Feature Image: Twenty20