Every year, a large percentage of the eligible population fails to file a FAFSA: the Department of Education estimates 40% of high school seniors do not file it and 25% of college students do not renew their FAFSA. And yet, there are plenty of compelling reasons to do so. The obvious one is access to financial aid. Here are some other reasons:
- The FAFSA is a requirement to take out loans under any of the federal student loan programs. Federal loans contain numerous protections that their private counterparts do not, including income-based payment plans, deferral and forbearance, and fixed interest rates.
- Research has shown that students whose families complete the FAFSA are more likely to enroll and persist in college.
- College tends to cost more than families expect, with the result that parents and students are spending and borrowing more than they had planned for. Financial aid and student loans are needed to fill the gap more often than anticipated.
- Your financial position may change. Recent jitters in the stock market may have people recalling the Great Recession, during which time the average decrease in family income was around 7% and the average family net worth dropped by about 40%. Even without a recession, job losses or changes or medical issues can arise and hinder a family’s ability to pay for college.
- It gives you some leverage with your student. If you’re among the many parents who have issued some form of ultimatum to your student along the lines of, “I will not pay for your college if you ______!” you will most likely want a fallback position in the event that your college student actually does that. Most of us would rather not derail our child’s future over a tattoo, for example– better might be having them take out a student loan to cover some of the expenses.
So, get on it. The FAFSA is here.
