I often hear families say, “We’re not bothering to submit FAFSA, because our income is too high to qualify for financial aid.”  This stems from a common misconception about college financial aid: that it’s only available to students from low income backgrounds. The truth is, there are several potential advantages that come from filing FAFSA, regardless of income level. Below are the reasons why I recommend that most families submit a FAFSA when their student first applies to college.

Assumptions are often wrong
Many families just assume they won’t qualify for aid, because their income is over a certain amount, 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 most people expect. Some families who assume they won’t qualify for anything are pleasantly surprised when the award letters arrive.

FAFSA can serve as “insurance” against future changes
Some colleges only offer aid in subsequent years if FAFSA was submitted when the student was an incoming freshman. 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. Furthermore, a family’s financial circumstances can change. While nobody plans to be laid off, it does happen. And finally, a sibling entering college will drastically increase aid eligibility, and many families find that they suddenly receive need-based aid when younger brother or sister starts college. Because some colleges will only give additional awards to students who filed FAFSA as incoming freshmen, it’s safest to just submit FAFSA when you first apply.

FAFSA may open the doors to other types of aid
Merit aid is awarded 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 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.

In other cases, colleges may offer a modest merit aid award to entice a student from a “full-pay family.” Everyone loves a discount, so college use these strategically with desirable applicants from families that will be able to foot most of the bill themselves.

And finally, there are a 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 colleges where FAFSA is required for merit aid. The only way to know for sure 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 could give an admissions edge
Because all colleges love full-pay families, showing that you have the ability to foot the bill yourself can actually increase chances of admission. Furthermore, data shows that students who submit FAFSA to the college are more likely to attend – hence, submitting FAFSA is a form of demonstrated interest!

FAFSA is required to access low-interest Federal student loans
Even if you’re fairly certain you don’t want loans, I strongly recommend leaving this option open until award letters arrive. The Federal student loans have very reasonable interest rates and repayment terms, and I’ve seen many families opt to accept them once they saw their award letters – either to take the edge off the price of an expensive private school, or so that the student can “have some skin in the game.” But they will only be offered if the student filed a FAFSA. Remember that filing FAFSA does not commit you to taking out loans – it only leaves the option open.

If you’re curious about how need-based aid is determined, read our post here, or learn more about the FAFSA in this post. You can also contact us if you’d like to talk about your particular financial situation – we offer a 30-minute consultation completely free of charge.

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