This is the best time to apply for college financial aid — here's why you should file the FAFSA now
- Applications for financial aid are now available for the 2023-24 school year.
- Experts say the sooner you apply, the better.
Applications for financial aid are now available for the upcoming academic year. Although the Free Application for Federal Student Aid for 2023-24 isn't due until June 30, 2024, it's wise to apply as soon as you can.
For a growing number of families, financial aid is key when it comes to college affordability.
With tuition on the rise, most college-bound students must rely on a combination of resources to pay for school, including income and savings, free money from scholarships and grants and, of course, student loans, according to education lender Sallie Mae.
That's where the FAFSA comes in.
More from Personal Finance:
GOP challenges to Biden's forgiveness plan put the relief at risk
Inflation and higher rates are a 'dangerous mix'
Pumpkin spice lattes are popular due to 'very simple economics'
"You want to maximize that free money first," said Sallie Mae spokesman Rick Castellano, "before you borrow."
But students must first fill out the FAFSA to access any assistance. The FAFSA filing season for the 2023-24 academic year opened on Oct. 1, and the sooner students file, the better.
The earlier families fill out the FAFSA, the better their chances are to receive aid, Castellano said, since some financial aid is awarded on a first-come, first-served basis, or from programs with limited funds.
Of those parents with college-bound students who didn't plan on applying for federal aid, 58% have now changed their minds, according to a new report by Discover Student Loans.
"Given the uncertainties in the economy right now around inflation and fears of a recession, it's understandable some families are feeling the impact of paying for college and reconsidering applying for federal aid," said Rich Finn, vice president of Discover Student Loans.
Scholarships are key to college affordability
"The FAFSA is the most important thing you can do to qualify for scholarships and grants," Castellano said. "In the end, that's free money that you don't need to pay back and that should help make college affordable."
Scholarships are a key source of funding, yet only 60% of families use them, according to the education lender.
Just about every family will qualify for some form of college aid.Rick CastellanoSallie Mae spokesman
About 6 in 10 families who used scholarships got them directly from their student's school. Those students received $6,335, on average.
The majority of families who didn't use scholarships said it was because they never applied.
Why more families don't fill out the FAFSA
Last year, 70% of families completed the FAFSA, up slightly from 68% the year before, which was a record low, according to Sallie Mae. This year, as many as 72% may apply, Discover estimated.
"My hope, always, is that more families complete the FAFSA," Castellano said.
Among those who don't apply, the most common reason is because they thought their income was too high to qualify for aid, followed by feeling that the application was too complicated or they simply didn't know about it, Sallie Mae found.
In fact, "just about every family will qualify for some form of college aid," Castellano said.
Many factors, not just income, go into determining how much aid students receive, including the total number of people in the household and the number of children in college, as well as other financial commitments such as a home equity loan or child support payments.
The application process itself is another hurdle, families say.
However, experts say you can complete the FAFSA form online at fafsa.gov or on the myStudentAid app in less than an hour, particularly if you have your paperwork, including W-2s and last year's tax return, on hand. Sallie Mae also has a free online FAFSA tool to help families navigate the process.