When students do not apply for FAFSA, many revert to private student loans, which often have high interest rates and lack the consumer protections that federal student loans include. The Institute for College Access and Success reports that 47 percent of private loan borrowers could have used more affordable federal loans. By completing the FAFSA form, students can make sure that they are taking advantage of the best student loan options.
Many students choose not to apply for FAFSA because they think that federal college aid is only available for those less fortunate than they are. Cora Manuel, assistant director of financial aid at Saint Mary's College of California, tells NerdWallet, "A lot of parents feel they won't qualify."
But in fact, most Americans are eligible, so if you think you don't qualify, think again.
"Aid is available for anyone with a household income below $250,000 a year," says Charlie Javice, founder & CEO of Frank, an online FAFSA platform. "So it's really important as FAFSA season comes up that people don't forget that there is no such thing as being too rich to file FAFSA."
Javice points out that a vast majority of Americans make less than $250,000. Being too rich "only applies to less than 5 percent of the U.S. population. Everyone should be doing it."