Every low-income, first-generation and underrepresented student should follow a few simple tips about applying for financial aid to help pay for college. They should always apply for financial aid, even if they think they are ineligible or don’t need it. They should apply for financial aid every year and apply early, to increase the amount of grants they get and allow them to work less. They can simplify the process by using the IRS Data Retrieval Tool. They should ask for help if they encounter problems.
Tip 1: Apply for Financial Aid Every Year
Every student should file the Free Application for Federal Student Aid (FAFSA) every year. The financial aid formulas are complicated, so it is difficult to know whether you will qualify without applying first. For example, the number of children in your family in college at the same time has a big impact on the amount of financial aid you get.
Tip 2: Get Grants So You Can Work Less
The FAFSA provides access to federal and state grants, such as the Federal Pell Grant. Students who qualify for grants may be able to work less, which increases the likelihood of graduating from college. Students who work a full-time job are half as likely to graduate within 150% of the normal time-frame, as compared with students who work 12 hours or less per week. Even working just a few hours less each week will help, since every extra hour that can be devoted to academics increases the likelihood of graduating.
If a student will be quitting their job to enroll in college full-time, they should appeal to the college’s financial aid administrator for an adjustment to the financial aid package. Financial aid administrators can substitute an estimate of income during the academic year for actual income during the base year. If income has decreased, this should yield an increase in the amount of financial aid the student receives.
Tip 3: Always Apply for Financial Aid
Unfortunately, you can’t get aid if you don’t apply. Each year, millions of students don’t file the FAFSA. One third of them, about 2 million students, would have qualified for the Federal Pell Grant. Two thirds of these students, about 1.3 million students, would have qualified for the maximum Federal Pell Grant. Collectively, they are leaving more than $10 billion in federal, state and institutional grants on the table.
It is unclear why millions of Pell-eligible students don’t file the FAFSA. Some students said that they thought that they were ineligible or had no financial need, did not want to take on debt, had no idea how to apply for financial aid or felt that applying for financial aid was too much work. Some students may they think they can work their way through college, because they are working a full-time job while enrolled part-time at low-cost public colleges, such as community colleges. Independent students may not have the luxury of being able to quit their jobs to go back to college full-time. But, perhaps they could work shorter hours if they qualified for college grants.
Tip 4: Apply for Financial Aid Early
Even when low-income students file the FAFSA, they tend to file the FAFSA later than middle- and high-income students. Only about a third (33%) of low-income students file the FAFSA during the first three months of the application season, compared with more than half (58%) of middle-income students and more than two-thirds (71%) of high-income students. Students should file the FAFSA as soon as possible after the October 1 start date, to avoid missing priority aid deadlines and early state deadlines. For example, a dozen states award state grants on a first-come, first-served basis until the funds are depleted. Low-income students miss out on billions of dollars of state and institutional grants each year because they file the FAFSA too late.
Tip 5: Use the IRS Data Retrieval Tool to Simplify the FAFSA and Avoid Verification
Low-income students should also take advantage of the IRS Data Retrieval Tool when filing the FAFSA. The IRS Data Retrieval Tool transfers information from federal income tax returns to the FAFSA. Not only does this simplify the FAFSA, but it also reduces the likelihood that the student’s FAFSA will be selected for verification. Any data element that is transferred unmodified from a federal income tax return will not be subject to verification.
Many low-income students find it challenging to get through verification. They may be the first in their family to go to college, and their parents may resist providing financial information multiple times. Or, their parents may be incarcerated, institutionalized or disabled, so getting the information needed for verification may be challenging. Every time you ask for information, it erects a new barrier to college access.
If the student’s FAFSA is selected for verification, they may be required to provide an IRS tax return transcript. The online IRS Get a Transcript tool is not friendly to low-income students who do not have a stable permanent address. The IRS Get a Transcript tool can be used to mail the tax return transcript to the address on the federal income tax return. If the taxpayer wants an online copy, has moved since the tax return was filed or wants the tax transcript sent to the address of the financial aid office, they will need to verify their identity by providing a financial account number (e.g., credit card, mortgage, home equity loan or car loan) and a mobile phone number, both in the taxpayer’s name. Otherwise, they will need to file IRS Form 4506-T on paper, which can take weeks to process.
Tip 6: Ask for Help
Completing a complicated form can be challenging, especially one as detailed as the FAFSA. Luckily, there are many sources of free help completing the FAFSA. Counselors and mentors are available to answer student and parent questions. The U.S. Department of Education sponsors a toll-free hotline, 1-800-4-FED-AID (1-800-433-3243), to answer questions about federal student aid and the FAFSA. The National College Access Network (NCAN) provides free financial aid workshops and one-on-one help completing the FAFSA through Form Your Future.