Should You Fill Out Financial Aid Forms?
Families going through the college application process with their seniors might be wondering if they need to complete the FAFSA (Free Application for Federal Student Aid) form if they think they are probably not going to qualify for need-based financial aid. The short answer is “No” – no student or family is required to apply for financial aid. But should they? That answer is in most cases “Yes.”
College is expensive. Your family is about to spend between $100,000 and $350,000 on a college experience for your child. Aid of any type is helpful. The FAFSA financial form can determine a student's eligibility for a myriad of grants, aid, and scholarships for all income levels based on need or merit and is an important tool in financing college for families of all different socio-economic groups.
Here are the reasons families should submit a FAFSA application, even if they don’t expect to qualify for need-based assistance:
Parents have a tendency to underestimate their own ‘neediness’ for financial aid, and they may be wrong. Eligibility depends on more than just income, like the cost of the college, family size, and special circumstances that affect your family’s ability to pay for college. Aid eligibility is based upon objective financial criteria, not a family’s own determination, and applying is the only way to know for sure if your family is eligible.
Colleges require the FAFSA for need-based aid. The information your family includes on the FAFSA is used to calculate the expected family contribution (now called Student Aid Index), which will guide the amount of the student award. Demonstrated need is drawn from a family’s income from the prior-prior year, effectively starting January 1 sophomore year of high school, so families should map out a plan for paying for college before this date. A plan is especially important for families that own a business, are separated, divorced, never married, or considering getting married. Each of these situations may significantly impact what colleges believe your family can afford to pay.
Some colleges require the FAFSA for merit-based aid, like the University of Massachusetts schools. It is sometimes difficult to find the answer to whether colleges require FAFSA forms for merit aid; thus, it is better to file the forms and have access to the free money the college offers.
The family wants to take out federal loans. Parents may want their children to have some responsibility in their education and the financing of it. The information reported on the FAFSA determines eligibility for federal subsidized and unsubsidized loans, which can be very affordable alternatives to other types of loans. A student can borrow $27,000 in their own name without a cosigner. Parents also may need to consider federal Parent PLUS loan options to afford the cost of college or want access to loans as a way to manage cash flow.
Completing the forms shows that your family is NOT need-based and thus, your student is very desirable. Remember, all colleges are businesses. Given the 2020 financial crunch schools are trying to navigate, full-pay students may be in even higher demand this year than in years past.
Some colleges also require families to fill out the CSS Profile, another online financial form that goes into more financial detail and assesses whether a family qualifies for non-federal aid like grants, loans, and scholarships. Although it is not as important for families to fill out the CSS Profile (if not required), it can make available different sources of funding for students.
There is no real downside to filing these forms. Families might be hesitant to complete a FAFSA because they fear their aid application will hurt their child’s chance of admission at his or her colleges (as an applicant expressing a need for aid). But simply applying for financial aid is not enough to hurt admissions chances. At many schools, a student would have to actually qualify for need-based assistance to be in any way endangered. Although only about 100 colleges and universities are completely need-blind, even at need-aware schools, the vast majority of students tend to be admitted or denied without regard to their financial situation. At need-aware colleges, your financial needs are not the biggest consideration in determining if a student is accepted or not. It is weak or borderline students for whom the need for financial aid may negatively affect their chances of admission.
While a necessity for moderate-income families who couldn’t otherwise afford college, completion of the FAFSA, the CSS Profile, and any additional aid application requirements for higher-income households is a choice every family should carefully consider. If truly undecided, families should meet with a financial expert to make the wisest decision.