The Importance of FAFSA and Why Your Family Should Apply

It’s October 1, and if you are in the college-going process, as my household is, hopefully you know the significance of the day– the Federal Application for Student Aid (FAFSA) opens today. Do you know what the FAFSA is and why it is so important?

The U.S. Department of Education awards $120 billion of aid every year through the FAFSA. On October 1 each year, the FAFSA opens for the following school year (in this case, the 2020-21 school year). Which means, if you have (or are!) a student who will enroll in college July 1, 2020-June 30, 2021 this is the form you should complete.

What is the FAFSA?

FAFSA is a free tool for applying for many forms of financial aid including federal grants and scholarships, loans, and work study. Not only does it count for federal assistance, but many institutions use it to award their aid as well. And, the sooner you get your application in, the better chance you have at receiving assistance, since aid is awarded on a rolling basis. You need to submit a new FAFSA each year. You may view the basic eligibility criteria here.

Experts recommend families complete the FAFSA, even if they are on the fence about going to college in the following school year. Having a FAFSA on file will speed things up and at least show you what assistance is available, if you choose to enroll. It’s important to note that when enrolling in college in late spring or summer, you may be too late to qualify for aid in that school year, however you still may qualify for school-specific aid, depending on individual institution rules. You can learn tips and tricks for maximizing your aid here.

What is the Federal Student Aid (FSA) ID?

Before filling out the FAFSA, you and your dependent child need to have an FSA ID.

The FSA ID is your unique username and password to access FAFSA, while removing personally identifying information. The student needs one; as does one of the parents. If a family has more than one dependent child applying for FAFSA, each child needs an FSA ID, while the parent only needs one. However, it is important that you remember your username and password as well as the answers to your “challenge questions” so you can access the system when you need to. Learn more here.

How much aid does a student need for college?

You have probably seen the headlines that college is expensive or that students go into debt by going to college. There are many ways to plan out a college education, after all, it is an investment in the future! Research, ahead of time, all of the costs that college may entail (from tuition to books and materials to housing to activities and more), so you are better prepared for the process. As you research schools of interest, log the information so you can better compare and find your best fit. Try our worksheet.

It’s important to know what the costs of higher education is and what will need to be repaid. Our research, released in August, showed that students demonstrate low knowledge of college financial aid. One in five high school students expect to pay for college on their own and 68 percent have some type of price sensitivity (e.g., Pell Grant eligible, averse to student debt or self-funded).

The report proposes the following ideas as solutions:

  • Information tailored for different student groups: Where possible, a more nuanced view of high school students and their financial needs should be adopted.
  • Improved outreach by college representatives: Colleges need to improve their outreach to the students who could use their assistance and advice the most; without it, students may not have the most up-to-date, personalized or accurate information to make college enrollment and student financial aid decisions.
  • Additional information about financial literacy: Despite efforts to increase financial aid literacy, there remains an urgent need for more financial literacy–specific interventions. Further, debt-averse students may need additional information about the value of undertaking some (but not too much) debt, and the difference in types of debt.

The Center also believes college prep outreach programs, such as GEAR UP, Upward Bound and AVID, among others, could grow beyond that initial mission and become an extremely valuable financial information source for those who participate in them.

There are many deadlines seniors should meet this school year, but the FAFSA completion should be at the top of the list. Seek out the many resources available online, through school counselors, or local college access offices. No student has to go at this alone.

Over the course of this month, you’ll hear from experts in FAFSA completion about how their organizations are tackling this incredibly important step in the college-going process. Stay tuned for more!