With average loan debts up to unprecedented levels, going to college is incredibly costly.
That means people can potentially miss out on thousands of dollars to help pay for college, just because they neglected to fill out a form.
For Carrie Warick, the director of policy and advocacy with the National College Access Network, this is a sign of a much larger problem.
“Completing the FAFSA is an important first step to enrolling in college,” says Warick. “Making the process simpler for students is necessary to encourage them to continue their educations.”
Importance of completing the FAFSA
We all know one of the core barriers to higher education is cost. And the price of tuition and the impact of student loan debt can be overwhelming.
To make college more accessible to students, the government announced changes to the FAFSA process for the 2017-2018 school year. Intended to increase the number of application completions, the FAFSA changes are significant compared to the rules of previous years.
Federal financial aid in the form of grants and loans can ease your financial burden. Through FAFSA, students can get valuable Pell grants, which can keep them from needing to take out additional student loans.
Encouraging students to complete the FAFSA is an important step towards receiving an affordable higher education.
Application period extension
Since tuition can vary from school to school, students in the past often applied without knowing if they will receive enough financial aid to cover college costs.
However, with these new FAFSA changes, finding out their financial aid information ahead of time can help students decide where to apply for school based on the total cost after financial aid.
“One of the most significant changes is that the government extended the period to complete the FAFSA,” explains Warick. “Families will be able to complete it starting on October 1 rather than having to wait until January 1.”
“That will give people more time to complete the forms and get their financial aid information,” adds Warick. “Then they can make a decision about where to go to school.”
Complete financial information insertion
Another major change is the use of entire prior year taxes to complete FAFSA.
Previously, families had to try to complete the FAFSA form using incomplete taxes without all of their W-2s or 1099s. Now, families can complete the FAFSA using tax returns that they have already submitted to the Internal Revenue Service (IRS).
“In previous years, families had to rush to get their taxes done or use estimates,” Warick says. “That increased the chances of errors and incorrect information. Now that they can use the information from the taxes they already filed, they are better prepared and more accurate.”
Moreover, applicants can use the IRS Data Retrieval Tool. This useful site allows students to import their tax information directly from their tax returns into the FAFSA application.
FAFSA applicants can now save time and minimize errors thanks to this IRS tool since students will no longer have to manually enter their information.
Concerns about FAFSA changes
While changes were instituted to make things simpler for students and increase FAFSA completion, Warick does worry about unintended consequences.
“We’ve seen some institutions change their deadlines to November, rather than abiding by the new FAFSA timeline,” says Warick. “That means that some students will only have six weeks between completing FAFSA and applying to schools.”
“That tight period is why we encourage colleges and universities not to truncate their deadlines,” Warick adds.
By providing more time to complete FAFSA and making it easier to fill out by using completed tax information, the changes will help schools and grant-makers make faster decisions on student aid.
And by offering information on what aid will be available earlier on in the process, families can make more informed decisions regarding college selection.
“For high school seniors, unless they had a sibling or family member recently complete FAFSA, they won’t notice anything different,” said Warick. “Instead, we’re focused on encouraging people to complete the FAFSA early to get the financial aid they are entitled too.”
The FAFSA changes will not bring down the cost of tuition or decrease reliance on student loans. However, it should simplify the process and provide more time to students to select the appropriate school.
Warick said, “The federal government made these FAFSA changes to make things easier on families.”
Need a student loan?Here are our top student loan lenders of 2019!
|2 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1)All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
(2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7% variable Annual Percentage Rate (“APR”): 96 monthly payments of $179.28 while in the repayment period, for a total amount of payments of $17,211.20. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 5/22/2019. Variable interest rates may increase after consummation.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
4 Important Disclosures for Discover.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.99% – 11.32%2||Undergraduate, Graduate, and Parents|
|4.50% – 11.35%*,3||Undergraduate and Graduate|
|4.84% – 13.49%4||Undergraduate and Graduate|
|4.25% – 11.30%5||Undergraduate and Graduate|
|4.50% – 9.47%6||Undergraduate and Graduate|
|3.74% – 9.72%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.32%8||Undergraduate, Graduate, and Parents|