Interest rates on student loans have increased dramatically in the past few academic years, and finding ways to minimize debt and save on college may be more important now than ever before. Unfortunately, too many students fail to access all the free college aid they're eligible for and the losses are staggering.
In fact, a January 2023 report from the National College Attainment Network (NCAN) showed that billions of dollars in Pell Grants were left unclaimed by the high school class of 2022. What makes this particularly surprising is the fact that filling out one form is all it takes to determine eligibility for Pell Grants, which are a type of student aid that typically does not need to be repaid.
Scholarships and other financial aid are also left on the table each academic year. If you're heading to college or wondering how you'll pay for higher education for a dependent, read on to learn which types of aid go unclaimed and what you can do to access them.
Key Takeaways
- An early 2023 report from National College Attainment Network (NCAN) showed that billions of dollars in Pell Grant funding were left on the table by the high school class of 2022 when they applied for college.
- Qualifying for Pell Grants and other financial aid requires students and their families to fill out the Free Application for Federal Student Aid (FAFSA).
- The National Scholarship Providers Association reports that as much as $100 in million in scholarships also go unclaimed each academic year.
- If you are hoping to minimize student debt, save money on college tuition, or both, your best bet is to pursue all types of financial aid you may be eligible for.
Up to $3.58 in Pell Grants Lost
According to a January 2023 report from the National College Attainment Network (NCAN), $3.58 billion in Pell Grants went unclaimed by students who graduated high school in 2022. This type of financial aid is awarded only to undergraduate students who "display exceptional financial need and have not earned a bachelor's, graduate, or professional degree," per Federal Student Aid.
Pell Grants are an especially important type of financial aid since this funding usually isn't required to be repaid, except in special circ*mstances.
The NCAN report also revealed that more than 1.65 million high school graduates failed to fill out the Free Application for Federal Student Aid (FAFSA) for the 2021 to 2022 academic year. Further, just under half of those graduates were likely eligible for Pell Grants and the average amount of aid left on the table worked out to $4,686 per student nationally.
$100 Million in Scholarship Money Unclaimed
The National Scholarship Providers Association (NSPA) estimates that an average of $100 million in scholarship funds are left unclaimed every academic year. This is mainly due to "a lack of applicants," they note, adding that scholarship providers consider a lot more than grades when choosing recipients for their awards.
College-bound students can get their share of funding by dedicating some of their time to finding college scholarships and taking steps to apply. Some of the best places to find college scholarships include school counselors, college financial aid offices, civic groups, and ethnic organizations you may belong to. An array of online scholarship search engines can also help match you with scholarships you could be eligible for.
Why Don't People Fill Out the FAFSA?
While there are many reasons families fail to fill out the Free Application for Federal Student Aid (FAFSA) each year, a report from the National Center for Education Statistics (NCES) shed some light on this issue. Based on survey findings shared in the report, common reasons for not filling out the FAFSA include believing you can afford college without it, a belief one won't be eligible for aid, not wanting to take on student debt, and not knowing how to fill out the FAFSA.
What Do Families Who Do Not Fill Out the FAFSA Miss Out On?
Filling out the FAFSA is the only way to find out what types of federal student aid you may be eligible for. Further, families who don't fill out the FAFSA miss out on access to federal student loans, federal grants, work-study programs, and need-based aid from states and individual colleges.
How Much Financial Aid Goes Unused?
A 2023 report from NCAN showed that more than $3.58 billion in Pell Grant funding was left on the table by the high school class of 2022 when they applied for college. According to the National Scholarship Providers Association (NSPA), another $100 million in scholarships go unclaimed each academic year.
The Bottom Line
Future and current college students are easily leaving billions of dollars on the table when they head off to school each year. However, the bulk of this issue can be solved by having all families fill out the FAFSA form each year, even if they don't think they qualify for financial assistance.
College students should also do their best to apply for college scholarships they may be eligible for, even if each application takes some time and some work. By putting some effort into paying less and borrowing less for higher education, the next generation of college graduates could be better off.
