The Importance of FAFSA
By: Allison Bunyer
Personal Finance- B2
To many Seniors, October 1st meant the start of October and the opening of FAFSA. FAFSA is the Free Application for Federal Student Aid, which is controlled by the US Department of Education. This form, full of questions about
the parent’s and student’s bank accounts, assets, and taxes are put together to determine a student’s EFC or “expected family contribution”. This number is the amount a family can ideally provide to go towards their student’s education each year. By determining this number, the Department of Education can determine if you can be considered for grants, loans, work-study programs or scholarships. FAFSA can be very important to fill out, even if you and your family do not believe you will qualify for aid.In 2015, “around $2.9 billion of federal grant money was left unclaimed after high school seniors eligible for Pell Grants -- which don't have be paid back” was reported by USA Today. This means that many people who do not think they qualify for aid, in reality do. By applying for FAFSA, you can save yourself a lot of money in the long run. Many students opt for loans to pay for college, and many of them come with high interest rates. Subsidized loans are one of the best, as the interest does not start accruing on the loan until you finish your bachelor's degree. These loans can help you pay off your loans faster, and hopefully allow you to start saving for retirement or buying a house faster. Whatever your financial goal is, it can probably happen quicker if you do not have mountains of college loans to pay off.
FAFSA can offer you loans, but they can also offer your scholarships or grants. These do not need to be paid back, and in a sense are “free money” for you to use on your education. You can be awarded these scholarships or grants by filling out your FAFSA, and sometimes these can help pay for a majority of your college tuition. Personally, I don’t want to miss out on free money and possibly have to get less money for college in the form of loans. Another form of financial aid is a work-study program. This is awarded once again by FAFSA, and is only available to students who fill out FAFSA. These programs vary by the college or university, but gives students the chance to work for their institution and earn the minimum wage, which can help pay for tuition. This can be very helpful for building a resume for after college, as most of the time, the job is related to your chosen major.
Now FAFSA can be helpful for paying less for college and possibly building up your resume, it can also help you attain your financial goals sooner. According to CNBC, “Almost one-fifth of people with student debt who apply for a mortgage are denied because of their “debt-to-income ratio,” what a person owes versus how much they make, according to the National Association of Realtors.” This means, for many young people, they need to pay off their student loans before they can make any large purchases. Plus, if they are slow at paying back their loans, this can lead the loans to build up even more interest and cause you to take even longer to pay them off. The main point is, if you file FAFSA there is a chance you have less in student loans because of qualifying for work-study programs or scholarships. This causes you to hopefully be able to reach your financial goals sooner in life, because of the low amount of loans you have to apply for.
Works Cited
AnnieReporter. “Why Buying a Home Can Be Almost Impossible with Massive Student Loan Debt.” CNBC, CNBC, 20 Apr. 2018, www.cnbc.com/2018/04/19/student-loan-debt-can-make-buying-a-home-almost-impossible.html.Imam, Medha. “$2.9 Billion Unused Federal Grant Awards in Last Academic Year.” USA Today, Gannett Satellite Information Network, www.usatoday.com/story/college/2015/01/20/29-billion-unused-federal-grant-awards-in-last-academic-year/37399897/.
“Types of Aid.” Federal Student Aid, 17 Feb. 2019, studentaid.ed.gov/sa/types.
Vuong, Sandra, and Sandra Vuong. “5 Things to Do After Filing Your FAFSA® Form.” ED.gov Blog, 3 Oct. 2017, blog.ed.gov/2017/09/5-things-filing-fafsa-form/.
I agree that FAFSA offers scholarship grants. Many high school seniors do utilize this option when paying for secondary education. Without the use of this, there could be even more loans you would have to pay.
ReplyDeleteI think it was really smart of you to talk about such a prominent topic, given that these classes are made up of mostly seniors. I like that you explained the difficulty of receiving money through different financial aid programs because it really gave an insightful opinion on the matter that is so important, especially at this time for the seniors that are going off to college within the upcoming months.
ReplyDeleteIts a good thing you’ve brought this topic up as many people who might be or are going to apply for college might want to know about FAFSA so they can go to school for what they want and not worry as much as if they were supporting themselves over the financial. side of things.
ReplyDeleteThe article provides great examples how to use money you get from FAFSA, but does not provide information on how to register for the FASFA which would have been helpful.
ReplyDeleteStudents often feel daunted when applying for colleges. On top of getting admitted to the college of their dreams, they need to consider the costs. For example, residents of Wisconsin pay an annual total price of $26,025 to attend UW-Madison full-time (including $9,273 for tuition). Only 33.3 percent of students attending public colleges and universities graduate in four years. That means that over 60 percent take more than four years to earn a degree. Four years at $26,025 per year adds up to $37,092 in tuition alone. If it takes six years to earn that degree, that brings the total up to $55,638 in tuition (not including room and board, books, or other costs). If students don’t take advantage of any “free money” they can get, they’ll find themselves in deeper debt after they enter the workforce. Starting salaries vary by occupation, but regardless of what an individual earns immediately after college, they are likely to find themselves paying off their debts for years after graduation. The work-study program is interesting because students can earn minimum wage while completing their studies. This can help them build up some money to pay off their loans and experience for their future “real-world” occupations. I agree that students should fill out FAFSA, even if they don’t think it’s worth it.
ReplyDeleteThis was a very relevant topic to write about. If you plan on continuing your education after high school you really must complete FAFSA. Instead of loans, it offers an interest free way to get financial aid for college.
ReplyDeleteThis was very informative. I think it is very important to fill out the FAFSA because of the multitude of benefits it provides. Most scholarships are academic based. Being in a low income family does not breed a good environment for academic achievement. Therefore, The FAFSA is perfect for our economy because it allows low income families to receive help.
ReplyDeleteBeing a junior, I didn't know too much about FAFSA before reading this article, so thank you for writing about this! It is nerve-racking to think about how much education after high school costs in the US. It's unfortunate that money is a huge aspect that prevents students from pursuing additional education. I didn't know that FAFSA provides work-study programs. That's nice to know,considering you will get a job on campus that you don't necessarily have to apply for. Plus, you can get paid while learning even more about your interests within this work-study. I will definitely make sure to fill out FAFSA as soon as it is available next year!
ReplyDeleteThis is very well written! I think, especially in places like Pewaukee where we have a lot of fortunate and affluent families, a lot of kids think filing the FAFSA is just a waste of time. Although there is a chance you may get nothing out of it, it is relatively quick if you have what you need prepared (ex. W2 forms, bank statements, etc.) and could possibly lead to a little extra money. You don't have to take a loan if they offer it to you, but taking this time to have a chance at less debt can lead to a much more financially stable future.
ReplyDeleteI think this article does a great job of outlining everything great about the potential of FAFSA and why it can be really important to fill out the forms, even if you don't think you will qualify for aid. I also liked the part of including a little bit about loans and the types of loans that are more helpful than others when it comes to interest.
ReplyDeleteI completely agree with what was stated above. I think that financial aid is so important and will continue to be important even throughout college. However, I also believe that there are other factors other than just thinking financial aid will not be rewarded that contribute to aid not being applied for or used/ received. One of the main reasons being, people are busy and/ or are too lazy to claim their aid. Time flies by senior year and sometimes it is difficult to jump on the money train.
ReplyDeleteAgastya Asthana,
ReplyDeleteThe FAFSA as you have mentioned is a generous grant from the government to go towards your education. Many people have the illusion that the FAFSA is giving away free money when, in fact, it is giving you back the dollars you have spent as tax. If you think about the government giving away free money would mean that the government is creating on whim in order to hand out to the general public. It makes more sense to think of FAFSA as a set of your taxpayer dollars that have been set aside so that they can be handed when the situation demands it. You did a great job of describing the importance of the FAFSA and the fact that people not applying with midset of not getting it are really missing out on something that could give them a financial edge.
It is true that the FAFSA has benefits for college-bound students, but often times, the FAFSA still can't provide students and families with enough financial aid. As I'm sure we all are aware, the price of a college education is through the roof. The only way a lot of students can afford college is through multiple scholarships that barely make a dent in the total cost. With that being said, I agree with everything that was stated; there is no harm in filing out the FAFSA because it will ultimately benefit you one way or another.
ReplyDelete