5 Reasons To Fill Out The FAFSA
Article written by Scott M. Kahan in Stroll Chappaqua - September 2023 Magazine
Many families question whether to fill out the Free Application for Federal Student Aid (FAFSA). You might think you’ve saved enough for college, or that your income and assets are too high to qualify for aid. With all the talk of how much Americans owe in student loan debt—$1.78 trillion as of the first quarter of 2023—you might think it’s better to avoid expensive schools than to borrow.
If your child is going to college in 2024, the Free Application for Federal Student Aid (FAFSA) opens on October 1st. Here are five reasons to fill it out—and why I often recommend it.
1. IF YOU THINK YOUR CHILD MIGHT QUALIFY FOR FINANCIAL AID:
Completing the FAFSA will calculate your Expected Family Contribution (EFC): the amount you’re expected to pay toward education based on income, assets, and other variables. This is an important number: colleges determine your need-based aid by subtracting your EFC from the cost of attendance. Depending on available funding, you might wind up with a financial aid package that makes a more expensive school a better deal—so don’t discount applying to costlier schools.
2. TO BE ELIGIBLE FOR GOVERNMENT LOAN PROGRAMS:
Many people can’t afford to fully finance college even if they don’t qualify for financial aid. Filing the FAFSA makes you eligible for various federal loan programs, if not subsidized, then unsubsidized. If you need to borrow, you need to file. Find out what’s available and give yourself options. If you don’t, the door is closed to you on government loans.
3. IF YOUR FINANCIAL SITUATION CHANGES:
Let’s say your child is a sophomore in college and your finances change. It could be a job loss, divorce, or death. File a FAFSA to register those changes so the college’s financial aid office can
reevaluate your circumstances. Schools source much of their loan and grant money from federal programs. Submitting the FAFSA unlocks those sources—and you may qualify.
4. TO ESTABLISH STUDENT CREDIT—AND TEACH YOUR CHILD ABOUT FINANCES:
Student loans are considered “good debt” (more education increases future income) and can help your child establish credit. Submitting the FAFSA is an opportunity to sit down and talk to them about what it means to finance education—and gives them some skin in the game, too. College is a significant investment. Even if you wind up paying as parents, talk about it.
5. FEDERAL PROGRAMS ARE MORE FLEXIBLE THAN PRIVATE ONES:
If you opt for private loans, you won’t need the FAFSA. But they’re not as flexible when you go to pay them off. Federal programs have more deferral options and are easier to qualify for. And federal loans for students don’t require cosigners. These programs make it easier to borrow for college. My advice is to look at them first.
Education costs can feel overwhelming. Completing the FAFSA opens doors—and engages your child in the financing process.
Every year I participate in a seminar at Horace Greeley High School about financial aid and paying for college. It is a great opportunity to learn more about this process and how to pay for college. This year it will take place on October 12th at 7:00 p.m. Check the HGHS calendar for updates.