An influx of college financial aid applications this year means that money could run out for students who don’t file early.
Due to financial strain caused by COVID-19, nearly 40% of families that didn’t previously plan to apply for federal financial aid now expect to do so, according to a recently released survey from Discover Student Loans.
The federal government, states, colleges and other organizations use the Free Application for Federal Student Aid, or FAFSA, to award financial aid. You must complete the FAFSA to be considered for financial aid.
You have 21 months to submit the FAFSA for any given academic year. For the 2021-22 school year, the FAFSA opened Oct. 1 and closes June 30, 2022. But that doesn’t mean you should wait.
"There is no downside to applying early, but a lot of risk in applying late," says Manny Chagas, vice president and head of marketing and product at Discover Student Loans.
Here’s why you should file the FAFSA now.
Better shot at more free money
The sooner you submit the FAFSA, the greater your chances are of getting free aid you don’t have to repay, such as grants or scholarships.
Federal Pell Grant money likely won’t run out, but other need-based aid, including that awarded through your school and state, is limited and awarded on a first-come, first-served basis. Jack Murphy, financial aid counselor at the University of Northern Iowa, named the Federal Supplemental Educational Opportunity Grant and his school’s tuition assistance grant as examples.
The Federal Work-Study Program also has limited funds, so you’ll want to file the FAFSA early to take advantage of it.
More time to appeal a financial aid decision
Students and parents who are dissatisfied with their aid amounts or have a change in economic circumstances can appeal the financial aid award from their school. To do this, you need to petition your school with a financial aid appeal letter and provide evidence to support your need for more aid. If you wait too long, the aid money could run out.
Those who file the FAFSA early are more likely to receive their school-based financial aid awards with their college acceptance letters. While your federal aid will be the same no matter where you attend college, you can send your FAFSA information to several schools to see which will give you the best school-based aid package. Doing so early will allow you to compare offers and appeal if necessary.
If you apply for the FAFSA late, you not only risk a smaller award to begin with, but you also have less opportunity to "shop around" and submit a successful appeal letter.
A quarter of parents surveyed by Discover Student Loans say they'll appeal their financial aid decision because of previous award amounts and pandemic-induced changes in family finances. In speaking about the survey, Chagas emphasizes that there tends to be more money available early in the process, so students should make the FAFSA a priority.
Murphy agrees. "Filing early makes sure you’re in the running to receive as many awards as possible," he says. "We see students that get [aid] one year, but not the next."
They don’t lose out on aid because they no longer qualify, Murphy explains. They just waited too long.