Pros and Cons of Submitting the FAFSA

Applying to College, Financial Aid, Saving Money

The re-designed FAFSA is finally available, which has many families wondering, “Do we actually need to submit the FAFSA?” This question is most common for families that do not expect they will qualify for need-based financial aid. At On My Way Consulting, we want to help our families make informed decisions. While we tend to recommend that all families submit FAFSA when their child is applying to college, it’s important to be aware of the pros and cons of submitting this form. 

Pros of submitting the FAFSA

Some families who think they won’t qualify actually do.  Many families assume they won’t qualify for aid, because their income is high, or because they own a home. And often they are right! However, the reality is that eligibility for financial aid is determined by complex formulas, which consider more than just income and assets. There are no strict cut-offs or maximums, and the formulas are more generous than many people expect. Some families who assume they won’t qualify for anything are pleasantly surprised when the award letters arrive.

Important: To be considered for the full scope of need-based financial aid, many colleges require additional forms in addition to the FAFSA. For many private colleges, this includes the CSS Profile and sometimes copies of your taxes. Check the financial aid page of each college’s website carefully for full details on applying for need-based aid.

FAFSA is required to access low interest Federal Student Loans.  Families who are considering taking loans to offset the cost of college should first consider the Federal Direct Student Loans, which have a low interest rate and a variety of repayment plans designed to accommodate recently graduated students. To qualify for these loans, the student will need to submit a FAFSA. (Note that for the purpose of qualifying for the Federal Direct Loan, you can file the FAFSA at any time; it does not have to be filed when the student first applies.)

FAFSA can serve as “insurance” against future changes.  If you don’t submit FAFSA as an incoming freshman and an unforeseen event makes the student aid-eligible in the future, some colleges will impose a 1-year waiting period on institutional aid, and others will not offer institutional aid for any of the subsequent years in college. A family’s financial circumstances can change! While nobody plans to be laid off, it does happen. Furthermore, over the course of 4 years, the availability of scholarships may change, and a student might be eligible for awards that didn’t previously exist. Because some colleges will only give additional awards to students who filed FAFSA as incoming freshmen, it’s safest to submit FAFSA when you first apply. (There is no list of these colleges, so you will need to call each college to learn their policies.)

FAFSA may open the doors to other types of aid, including merit aid.  Merit aid is awarded primarily based on a student’s academic or extracurricular achievements. Surprisingly though, financial circumstances sometimes play a role in determining who gets merit aid. In some cases, a college will award merit aid specifically to students who applied for aid, but just missed qualifying for need-based aid. The assumption is that if the family considers themselves to have financial need, then offering some aid to offset the cost will make the student more likely to attend.

There are also a small number of colleges with merit awards that can only be given to a student who has filed the FAFSA. Because these awards change year-to-year, there is no up-to-date list of these colleges. The only way to know is to call the financial aid office of each college you are applying to, but it’s far more time efficient to simply file a FAFSA.

Submitting FAFSA is a form of “demonstrated interest.”  Many colleges are more likely to admit students who are engaged and therefore likely to attend, and submission of the FAFSA shows a higher level of commitment. This is only applicable for private colleges that consider demonstrated interest in their admissions process. 

Some states require submission of the FAFSA (through the high school).  If you live in a state that requires students to submit FAFSA, your school counselor will notify you and can also provide information for how to opt-out.

Cons of Submitting the FAFSA

Filling out the FAFSA can be a bother, and may feel like an invasion of privacy.  Submitting the FAFSA requires opening new online accounts, saving passwords, looking up financial information, monitoring emails, etc. Both the student and the parent(s) will need to be a part of this process. For families that need to maximize aid consideration, it is absolutely worth the time and effort. But for families who plan to pay the full college cost out-of-pocket, AND have a financial cushion enabling them to weather any financial changes (loss of job, death of a parent, etc.), FAFSA may not yield any benefit that makes the time and effort worthwhile.  

Applying for financial aid could negatively affect admissions chances.  If a student is on the cusp of admissibility, not applying for financial aid will classify the student as “full pay,” which can advantage them over another who would be eligible for need-based aid. Colleges love full-pay families! As they are putting the last portion of their incoming class together, most institutions look closely at their net tuition revenue goals, and students who are on the cusp of admissions AND also applied for aid may get moved into the “deny” pile. 


Deciding whether to submit FAFSA can be challenging! You can contact us if you’d like to talk about your particular financial situation in order to make an informed decision – we offer a 15-minute consultation completely free of charge.