The FAFSA: To File or Not to File?

If your family is able to fully fund your child’s college education, you might feel that there is no reason for you to fill out the FAFSA (Free Application for Federal Student Aid). You may think you won’t qualify, and may even believe there is an advantage to demonstrating to colleges that you are able to pay full tuition. There is some credence to these concerns. On the other hand, if your child is gifted academically or talented in a unique field of interest (for example, athletics, arts, or community leadership), you could be missing out on consideration for the segment of merit scholarships that require submission of a FAFSA form. In the end, deciding whether or not to file is a complex decision based on a number of factors.

Can filing the FAFSA hurt admissions chances?

Since the economic downturn in 2008, students who are able to pay full tuition are perhaps more desirable to some colleges. As a result, many families worry that indicating an intent to file the FAFSA will impact their child’s admission negatively.  This concern does have some validity. Whether or not it actually will depends primarily on two factors:

  • Whether the college’s policy is need-blind or need-aware, as well as the percentage of needs-met.  The “need-blind” and “need-aware” policies apply to the admissions process itself.  “Need-blind” means that the college reviews applications without consideration of the applicant’s intent to file the FAFSA. Examples of schools that use need-blind admissions policies include MIT, Harvard, Princeton, Yale, Amherst College, and Dartmouth. “Need-aware” colleges, on the other hand, take the applicant’s intent to file the FAFSA into consideration when they make admissions decisions. Colgate University, Washington University in St. Louis, Occidental College, Gettysburg College, and Bryn Mawr College are examples of schools that use need-aware admissions policies.

“Needs-met” is a financial aid policy that refers to the percent of the applicant’s financial need that is met AFTER the applicant is accepted and decides to matriculate; it comes into play only during the process of granting financial awards. While Harvard and MIT are need-blind, these schools also meet 100% of an admitted student’s demonstrated financial need. On the other hand, Boston University and NYU use a need-blind admissions policy, but do not guarantee that they will fully meet a student’s demonstrated need. Therefore, a student might be admitted, but not receive the financial assistance necessary to pay the tuition. According to Union College, they are need-aware, because “once we admit you to Union, we will find a way for you to attend. We will put together a realistic financial aid package based on your family’s ability to pay, and you will most likely be able to afford our school.”

  • The college’s financial resources, as reflected in the endowment. Colleges use their endowment, not their annual operating budget, to fund financial aid.  After the 2008 economic downturn, most colleges’ endowment took a hit. As a result, many were required to alter their policies toward funding both need-based and merit-based financial aid.

Indeed, some colleges that were formerly “need-blind” became “need-aware.” Wesleyan University, Reed College, and George Washington University, for example, have moved away from an entirely need-blind admissions policy to a combination of need-blind and need-aware admissions. Wesleyan estimates that they admit about 90% of students through a need-blind process, and then consider need as an admissions factor for the remainder. Therefore, if a student’s application is on the fringe of qualifying for their admissions standards, their financial ability to pay is considered.

What if I don’t think I’ll qualify for financial aid?

Some families feel that a high income will not prevent them from qualifying for any financial aid. Others believe that their child’s grades are not high enough to be considered for scholarships, or that the FAFSA form is too confusing and time-consuming.

The perception that your family’s income is too high to quality for need-based financial aid may be inaccurate.  Filling out the FAFSA enables students to learn about the possible scholarships, grants, federal work-study programs, and student loans for which they might be eligible.

In reality, colleges and the federal government consider many factors in determining who is eligible for financial aid, including the number of children in your family, how many of these children are simultaneously attending college, and the age of the oldest parent.

More importantly, each college evaluates the FAFSA in a different way.  Colleges are now required to post a financial aid calculator on their websites to provide applicants with an estimate of the amount of financial aid they can expect from, given their particular financial situation. Mark Kantrowitz, a financial aid expert and the publisher of FinAid.org, provides several calculators to help families estimate how much school will cost, how much they need to save, and how much aid they will need, as well as a wealth of information concerning scholarships.

Submitting the FAFSA can help you obtain merit aid.

Even if you are able to pay the full sticker price for college, filling out the FAFSA can open doors to free money: merit scholarships. According to the Office of Federal Student Aid, “Some schools won’t even consider you for any of their scholarships (including academic scholarships) until you’ve submitted a FAFSA. Don’t make assumptions about what you’ll get— fill out the application and find out.”

If a student’s academic profile would place the student in the top 10% of the matriculating class (in other words, the student is likely to be admitted), the college may be more inclined to offer merit-based aid. Some schools, like Tulane University, University of Miami, University of Chicago, and University of Southern California, give many merit-based scholarships to entice highly qualified students to attend.

Merit offers can serve a variety of functions regarding yield, or the likelihood of attendance.  “Rather than lose bright students to less-expensive public colleges, universities like Tulane offer sizable amounts of aid based mainly on academic promise,” states the New York Times.  In addition, some public universities use merit aid to draw wealthy students from private universities, according to Donald Heller, dean of Michigan State University’s College of Education.  Finally, many of the most selective colleges in the country, including the Ivies, do not award merit-based aid, and other colleges, such as Chicago, use merit aid to lure high-performing applicants to matriculate.

When Should You File the FAFSA?

Even if you have not checked off an intention to file the FAFSA on your child’s college application, you can reconsider this option and still apply for financial aid. The FAFSA can be filed online on or after January 1 of each year, using your family’s estimated taxes from the previous year if your current taxes have not yet been filed. The FAFSA application takes the average person about 1-2 hours to complete, according to the Department of Education.

For students applying in the fall of 2014 for matriculation in the fall of 2015, the federal deadline for the online FAFSA is midnight Central Time, June 30, 2015.  Note that each state has a different deadline, and that colleges may have different deadlines as well.  Most importantly, keep in mind that there are advantages to filing as early as possible, because “Most student financial aid is limited (there isn’t always enough for everyone who applies) and awarded on a first-come, first-served basis,” according to Student Financial Aid Services, an established aid advisory group.

Navigating the financial affordability of college and opportunities for scholarships and grants can be an overwhelming prospect. There is no one right answer for everyone; each family must decide what makes the most sense given their financial situation.

For more information about financial aid and the scholarship opportunities available to you, contact Collegiate Gateway – we’re always happy to help.

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