It’s the same mantra every January: File the federal financial aid forms that determine eligibility for scholarships and other college money as soon as possible.
Now data compiled by Edvisors, a financial aid resource site, underscores why this is so important and why it often pays to file early.
This is FAFSA season, when millions of high school seniors and college students look forward to filling out the Free Application for Federal Student Aid as much as they do writing a 20-page term paper.
The FAFSA is the U.S. Department of Education document that most public and private colleges and universities require to determine the amount of financial aid that students are eligible to receive from federal, state and college sources. The 2015 forms are available from the Department of Education at www.fafsa.ed.gov.
But just because the forms are out doesn’t mean students and parents follow through early. Reasons vary: Important tax documents aren’t yet available, student don’t think they will be eligible for assistance, the forms are confusing … tomorrow, tomorrow.
Those delays come with a cost that runs into the billions of dollars that students are missing out on, according to Edvisors.
The college aid resource firm fleshed out some of those numbers in a report scheduled to be released next week. It looked at whether students who filed the forms early in the year tended to fare better than those who waited until later in the year. And, more important, by how much.
According to the report, students who file the FAFSA in January, February or March receive on average more than twice the grant funding from federal, state and college sources as those who file the forms later in the year. Grants, which are based largely on financial need, are most valuable because they don’t require repayment.
The average payout amounted to $6,730 in grants for early filers versus an average of $3,318 for those who received grants from April on. Put another way, the report said, more than 1 million students might have received as much as $3.8 billion more in educational grants had they filed the FAFSA during the first three months of the year.
“From a practical point of view, you need to apply as soon as possible,” said Mark Kantrowitz, senior vice president and publisher at Edvisors and the author of the student aid report.
Also interesting, students from higher-income families tended to file earlier than students from lower-income households, the report said.
One caveat: The funding numbers were based on 2009 information, though Kantrowitz said in an interview the trend line hasn’t changed.
Kantrowitz noted that this year nine states will award their college grants to in-state students first come, first served starting in January, until the money runs out. Three states have February deadlines for financial aid applications, and 11 states have March deadlines.
The message to families: Filing early and being aware of the filing deadlines are musts for receiving strong financial aid packages. That includes knowing the deadlines set by the schools.
Many of those dates come before the April 15 tax-filing deadline. So families shouldn’t wait to file the FAFSA until every key tax form is in and the return is completed. You can estimate certain income information — using your last pay stub of 2014, for example — and then retrieve your electronic form later to update.
“Your natural inclination is to wait as long as possible to file the FAFSA,” Kantrowitz said. “Never do that.”
Beyond the numbers, the Edvisors report recommended several steps to increase early filing:
▪ High school guidance counselors, college financial aid administrators and other educators should increase student and parent awareness of the importance of filing the FAFSA early.
▪ School districts should require filing the FAFSA as a graduation requirement.
▪ Financial aid assistance programs, such as College Goal Sunday, should be expanded to provide free help to more students.
▪ Create a “lottery” as part of the free application submission, with one filer from each state randomly selected to win a $100,000 scholarship.
At least, said Kantrowitz, there would be no losers on this lottery.