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As mentioned in our previous article about the recent changes to the FAFSA deadline, the government has been accepting applications since October 1st. That means we have just passed the six-month mark, and a LOT of FAFSAs have already been processed for the 2017-2018 school year. Ideally, if your student is heading to college in the fall, their FAFSA should already be done. If not, then the time is now.
Why You Need to Submit Your FAFSA Now
When it comes to financial aid, you don’t want to be late to the party. Why? Because awards are given on a first-come, first-serve basis regardless of whether the FAFSA deadline has passed.
Every form of financial aid, including federal grants, operate on a budget; there is only so much money available to go around. As applications are processed, small pieces are designated to qualified applicants. And, when there are no more pieces left, no more awards will be granted.
This means that, even if your student clearly qualifies and they finish their application before the official FAFSA deadline, they won’t get the funds because there are simply none to give.
What Kind of Funds Can You Get from FAFSA?
The FAFSA provides students with access to various funding sources. Often, the most coveted form is grants. Grants are considered free money (meaning you don’t have to pay it back!) that can be used for a range of educational expenses including tuition and books. For your child to receive a grant, you must meet certain criteria like falling below certain income limits based on your family size.
It is important to note that grant funds are limited, so it is possible to qualify for a grant but not receive one because the available funding has run dry. Again, this is why you want to submit FAFSA as early as possible.
Other funds are also made available based on the FAFSA, most commonly as student loans. Federal student loans are not free money, as they have to be paid back in accordance with your loan agreement. However, the interest rates are typically lower than the student loans you can find through traditional lenders, like banks and credit unions.
Federal student loans come in two forms: subsidized and unsubsidized. Subsidized loans offer better terms including:
- No interest while your child is enrolled in school at least half-time
- No interest during the six-month grace period after your child leaves school
- No interest during a period of deferment
Unsubsidized loans do not provide any of the “no interest” benefits offered by subsidized loans, making them more costly over the long-term. While subsidized loans are need-based awards, families that do not qualify for grants can still often qualify for at least this type of loan which saves students tens of thousands of dollars. Unsubsidized loans can be available without having to demonstrate financial need.
The interest rates for subsidized and unsubsidized federal student loans are set by the government, so you don’t have to shop around to find the best deal. For loans disbursed between July 1, 2016, and July 1, 2017, the interest rates are 3.76 percent for direct subsidized loans for undergraduates and 3.76 for direct unsubsidized loans for undergraduates. These rates are subject to change for new loans issued after July 1, 2017, but this does not affect the interest rates on loans that have already been issued.
And Did We Mention the FAFSA Deadlines?
Most people mistakenly assume that the only deadline that matters is the federal deadline on June 30, 2017. However, states also have their own deadlines for financial awards based on your child’s FAFSA information. And these deadlines are all over the place.
For example, deadlines for the Idaho Opportunity Grant and the California Cal Grant have already passed (they were March 1 and March 2, 2017, respectively). Delaware and Texas public colleges have a deadline of April 15, 2017, which is only two weeks away.
In some cases, states will extend the deadline to give students more time to apply (often if funds are still available.) This year, the FAFSA website actually had technical issues so many places extended their deadline which is good news for you!
For example, Indiana as well as a few other states extended the deadline from March 10, 2017, to April 15, 2017. That means those students who missed the first deadline actually still have time! Extensions aren’t typically reflected on the federal FAFSA website, so you may need to check local school websites or newspapers, or simply run a search through a search engine, to get that information.
And, if you want to make matters more complicated, each college or university may have different deadlines to be considered for institutional awards.
This makes it critical to review all of the available information on deadlines as soon as possible, especially if your child hasn’t finished their FAFSA.
We suggest you confirm deadlines set by your:
What If the State or School FAFSA Deadline has Passed?
If your child missed the state or school FAFSA deadline, all is not lost. It won’t necessarily affect their ability to be accepted, but it can mean they missed out on valuable aid funds.
However, it is important to have them finish their FAFSA as quickly as possible. Why? Because there could still be aid money out there. Often, the deadline establishes priority amongst applicants but, if all of the funds aren’t awarded, late applicants might get a second chance.
While it isn’t wise to count on funds being left over, as it is highly possible that won’t be the case, it does mean that the faster your child gets their hat tossed in the ring, the bigger the chance that it isn’t actually too late.
You can also reach out to your child’s financial aid office to see if they have any flexibility or funds leftover. You may be pleasantly surprised with how helpful they can be.
How to Avoid Missing the Deadline in the Future
If you want to make sure your child doesn’t miss the FAFSA deadline in the future, it is important to be prepared. The taxes you are filing this year, for the 2016 tax year, will have the data required for completing the FAFSA for the 2018-2019 school year. That means it is important to save those documents in a place that is easy to find when the new filing period opens in October 2017.
And, if you want to make sure your student is one of the first applicants next year, set a calendar alert to remind them when the time arrives for next year’s FAFSA. Remember that the FAFSA opens October 1st for the following school year.
And Don’t Forget the Scholarships!
While getting funds based off a FAFSA is great, especially in the case of grants or other awards that don’t lead to debt, they aren’t the only source of funds available. Scholarships are another wonderful way to get the money your child needs to college without having to take on the burden associated with student loans.
Like government grants, scholarships don’t have to be repaid when used for qualifying expenses. That means your student can get a quality education for less money out-of-pocket and no painful interest rates.
Scholarship deadlines are incredibly varied, and there are plenty whose application deadlines haven’t yet passed. If you or your child want to learn more about how to make the most of scholarship opportunities, join our Free Webinar! Simply click here to reserve your spot today.
Would you like more information about how you can help your college-aged child succeed? Here are some other articles you might enjoy:
- 25 Scholarships to Apply to By the End of Spring Break
- 5 Steps to Negotiate College Tuition and Save Thousands of Dollars
- How to Help Your Senior Finish the School Year with Enthusiasm (and Avoid Burnout)