6 FAFSA benefits you don't want to miss

Are you applying to college but have decided not to file the Free Application for Federal Student Aid (FAFSA)? Over the last several years, around 40% of incoming students have not completed the FAFSA. For many, it’s because they’ve heard that the application is only for students from low-income families – which isn’t the case.

Several different factors can go into determining student financial aid. Even students from more privileged backgrounds may qualify.

Benefits of completing the FAFSA

Here are the 6 most important benefits of filing the FAFSA. Given the high cost of college, you won’t want to miss out on any of these.

1. Federal student loans may have lower interest rates

Students, even if they come from a more privileged background, often need loans to cover the cost of college for four years. Submitting the FAFSA qualifies you for federal student loans, which generally have lower interest rates compared to private student loans.

2. You may be eligible for forgivable student loans

Federal student loan forgiveness programs, including the Public Service Loan Forgiveness Program (PSLF), are available for those who qualify. Graduates working full-time with the government or not-for-profit organizations might qualify for the PSLF program. Borrowers need to have Direct Loans from the DOE, be repaying their loans, and make a total of 120 payments to apply.

You might also be able to discharge your loans if the school has closed, the school misled you, or you’ve declared bankruptcy.

3. It’s required for many Federal and State scholarships, grants, and aid programs

The FAFSA benefits students in more ways than just being eligible for more federal student loans. Federal aid, work study, and state grant and scholarship programs require the FAFSA from interested applicants. If you don’t complete it, you won’t qualify for these programs.

These grants and scholarships have limited funds, so be sure to submit your FAFSA as soon as possible to reap the maximum benefits. Also, check the requirements for each state grant, as they may require different documentation and financial aid applications.

In select states (IA, MN, MS, NJ, NY, PA, VT), parents and students can transfer their FAFSA information directly to the state aid application.

4. You could be eligible for institutional aid

Many colleges and universities use the information on the FAFSA as a deciding factor for institutional aid, especially need-based aid. If you haven’t completed your FAFSA, your school won’t have the information it needs to send you a financial aid package, which could include need- or merit-based aid from the college to help you pay for school.

Colleges have limited funds that they allocate to students based on several different factors. In some cases, the FAFSA could even be the deciding factor for merit-based scholarships. They require the application to ensure the student has first maximized their federal aid.

5. Some scholarships and grant qualifications require it

There are agencies, communities, businesses, individuals, and more that offer scholarships directly to students. However, some programs require the FAFSA or demonstrated need. If you can’t clearly demonstrate your need or show them your Student Aid Index (SAI), you might be passed over for the award. Even some merit-based programs show preference to applicants with financial need.

6. Filing early brings its own benefits

The FAFSA usually opens October 1st. While you technically have until June 30 of the award year to complete it, you don’t want to wait. Many states and colleges have their own FAFSA deadlines, usually in mid-winter or early spring. Schools, organizations, and state grant programs can and do run out of student aid – sometimes even before their stated deadline. But the earlier you apply, the more likely you are to receive better financial aid for college.

Submit the FAFSA as soon as possible

Even if you think you won’t qualify for any financial aid from the federal government or your school, it’s still a good idea to complete your FAFSA. Your offer might surprise you. Plus, it’s a requirement for some need and merit-based scholarships and grants.

If you need another reason to go fill out the FAFSA right now – it won’t take long. The FAFSA has continuously been updated each year, and the process gets easier every time. While the previous form could take hours to complete, it now often takes students and families less than an hour.

After you’ve completed the FAFSA and received acceptance letters, you might be confused by the financial aid offers. They don’t follow a single format, and it can be difficult to tell which is the better deal. However, our Financial Aid Offer Comparison tool can help cut through the confusion and make it easier than ever to understand what you’re being offered. Check it out today to understand how much you're paying for college!