• Students Lose BILLIONS In Aid Because They Can’t Fill Out A Form

    President Obama’s State of the Union address is expected to include a call for a major increase in the amount of aid the federal government offers college students. However, a recent study has found that even among the funds currently available, close to $3 billion in Pell Grant aid is going unclaimed.

    According to an investigation by NerdWallet, a personal finance website, about 47 percent of 2013 high school graduates never bothered to file the Free Application for Federal Student Aid form. FAFSA is the first step required for a variety of federal student aid programs, including Pell Grants, which award up to $5,830 per year to qualifying students that, unlike loans, never have to be paid back.

    While a large chunk of those who didn’t complete FAFSA wouldn’t have qualified for aid in the first place, many others would have, NerdWallet found, and their failure to apply means that huge piles of federal aid money were left unclaimed.

    NerdWallet calculated the total missed Pell Grants by finding the number of graduating seniors in each state who never completed FAFSA, calculating how many would have qualified for federal aid if they had, and then multiplying that number by the state’s average Pell Grant for the 2013-14 cycle.

    Overall, about 821,000 students are believed to have been eligible for Pell grants but never applied, and they missed out on a total of $2.9 billion in aid. Unsurprisingly, California missed out on the most money overall with nearly $400 million left on the table (an average of $3,600 per student), but Utah was the state that missed out the most proportionately, as 40 percent of Pell eligible students never completed FAFSA there.

    Author Gianna Sen-Gupta told USA Today the site investigated the matter in order to demonstrate just how much money was out there and encourage high school seniors to fill out FAFSA forms. The forms themselves are often seen as the culprit behind low application levels for financial aid. With over 100 questions to answer, the document is regarded by many as lengthy, intimidating and cumbersome to complete, potentially leading many to put off filling it out before ultimately failing to ever do so.

    The problem hasn’t escaped the White House’s notice. Last year Obama announced a FAFSA Completion Initiative that offered additional resources to high schools in an effort to reach out to students who fall through the financial aid cracks.

    The huge amount of missed money sheds an interesting light on Obama’s plan that would spend $60 billion over 10 years to provide free tuition for community college. Community colleges typically have low tuition that could be substantially or completely covered by Pell grants, yet many are failing to take advantage of the opportunity, raising the question of how many would also miss out on any new programs the president creates.

    Recently, Republican Sen. Lamar Alexander and Democrat Michael Bennet proposed a bipartisan solution, the Financial Aid Simplification and Transparency Act, which would reduce FAFSA to a mere two questions: “What is your family size?” and “What was your household income two years ago?” Thus far, though, the bill has yet to even advance past the committee stage.

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