White House action on federal student loan forgiveness could be announced in the coming days. But how to pay for college without accruing too much debt will continue to be a challenge for current high school students.
Most families use a variety of tools to make ends meet in light of rising tuition. According to Sallie Mae’s annual “How America Pays for College” report, income and savings cover more than half of college expenses, free money from scholarships and grants accounts for about a quarter of the expenses, and student loans make up the majority of the remainder.
However, according to Sallie Mae spokesperson Rick Castellano, families are passing up chances to lower the cost of attending college.
The Free Application for Federal Student Aid can be used in this situation.
The FAFSA must be completed by students in order to receive any form of aid. The FAFSA filing period for the 2023–2024 academic year begins this fall on Saturday, October 1; the earlier students file, the better.
Since some financial aid is given out on a first-come, first-served basis or from organizations with limited funding, Castellano said that the earlier families complete the FAFSA, the greater their chances are to get aid.
Sallie Mae also discovered that 75% of households are unaware that the FAFSA is open as of October 1.
“You want to get in line for free money; much of it is first come, first served,” Castellano said. If not, you’ll be “leaving free money on the table, and those dollars are what help make college affordable.”
According to Castellano, fewer than half of the families are aware that all students are eligible to fill out the FAFSA. “That’s concerning.”
The affordability of college may depend on scholarships
Only 60% of families use scholarships, despite the fact that they are a major source of money, according to the education lender.
6 out of 10 people who applied for scholarships received them directly from the institution where their student was enrolled, with an average award of $6,335.
Most families that didn’t use scholarships claimed they didn’t even apply, which was the reason.
“There are 6 million scholarships available for any number of interests or skills,” Castellano said. “They don’t all go to those at the top of the class or star athletes.”
The reasons more households don’t submit their FAFSAs
According to Sallie Mae, last year’s FAFSA completion rate of 70% was marginally higher than the record-low completion rate of 68% the year before.
“We would love to see that number be higher,” Castellano said.
Sallie Mae discovered that among those who don’t apply, the most frequent excuse is believing their salary is too high to qualify for aid, followed by believing the application is too difficult or they simply aren’t aware of it.
“Just about everybody who applies for the FAFSA is going to qualify for some form of aid,” Castellano said.
The amount of financial aid students get is determined by a variety of factors, not simply income, including the total number of household members, the number of children attending college, and other financial obligations like a home equity loan or child support payments.
Families claim that the application procedure itself is a barrier.
However, according to experts, you may finish the FAFSA form online at fafsa.gov or on the myStudentAid app in less than an hour, especially if you have your supporting documents on hand, such as W-2s and your most recent tax return.