How Students Missed Out on $2.3 Billion in Free College Aid

Anna HelhoskiOct 9, 2017
financial aid

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The high school class of 2017 left as much as $2.3 billion in free federal grant money for college on the table, according to a new analysis by NerdWallet. Free money went unclaimed due to students not completing or submitting the Free Application for Federal Student Aid, or FAFSA.

Filling out the FAFSA is the key to unlocking financial aid for college, including federal, state and institutional money. Federal aid includes Pell Grants, which are awarded to undergraduate students from low-income families. Unlike student loans, Pell Grants do not have to be repaid. They are awarded based on financial need — determined via the FAFSA — and other factors. The maximum Pell amount for the 2017-18 school year is $5,920.

» MORE: Don’t miss out on free college aid. NerdWallet’s FAFSA Guide can help you through the process.

What we found

In the 2016-17 academic year, 1,234,249 high school graduates didn’t fill out the FAFSA. Of these grads, we calculate 648,191 of them would have been Pell eligible. By submitting the FAFSA, these graduates could have earned Pell Grant money.

NerdWallet’s analysis shows that the average amount of money left on the table per eligible high school graduate who didn’t apply was $3,583. The total amount left on the table by all such grads was $2,319,016,315. Our calculations included graduates who didn’t immediately go on to college to show the scope of students who would be eligible for federal aid if they did apply.

Why this matters

Missing out on free financial aid could mean taking on more debt to pay for college or graduate school. Filling out the FAFSA is the primary way to receive grants and scholarships, as well as work-study. It’s also the only way to borrow federal student loans, which tend to have lower interest rates, more repayment options and more borrower protections than private loans.

“The FAFSA gives students access to critical financial aid now, but it also makes student loan repayment more manageable in the future,” says Brianna McGurran, NerdWallet’s student loans expert. “That means more flexibility if the unexpected occurs and more room in their budgets to save for long-term goals.”

The less debt you take on to pay for college now, the less money you’ll need to repay later. The standard student loan repayment plan lasts 10 years, which means borrowers commit to a decade of making spending decisions with student debt in mind. And for those on income-driven repayment plans, it takes even longer.

Getting through college without taking on a lot of debt means you’ll be better situated to make smart financial moves, like building an emergency fund and saving for retirement. You might be able to purchase a home sooner, too. And without a ton of debt hanging over your head, you’ll likely feel less guilty about dining out once in a while or taking a vacation.

  • Utah and Alaska had the highest percentage 2017 graduates who didn’t complete the application — 55% and 50%, respectively.

  • The lowest percentage of incomplete FAFSAs among U.S. high school graduates was 17% in Tennessee. The next lowest was 28% in Delaware followed by 29% in both Mississippi and Massachusetts.

Methodology

In each state, we looked at Pell Grant-eligible graduating high school seniors who didn’t complete the FAFSA in the 2016-2017 application cycle and multiplied that number by the average amount of Pell aid disbursed to all students.

The formula we used to calculate Pell Grant money left on the table

Number of high school graduates not completing FAFSA equals the number of 2016 high school graduates minus the number of completed FAFSA applications by June 2016.

Number of Pell-eligible high school graduates not completing FAFSA equals the percent of Pell-eligible applicants multiplied by the number of high school graduates not completing FAFSA.

Pell Grant money left on table equals the number of Pell-eligible high school graduates not completing FAFSA multiplied by the average Pell Grant award.

Why we focused on Pell Grants

As the largest source of federal funds for college, Pell Grants are free money and a major part of most financial aid award packages — before work-study funds and student loans are tacked on.

We used the most recent data from the Department of Education to find the average Pell Grant award across all colleges and universities in each state. The maximum amount awarded in the 2016-2017 cycle was $5,815; for 2017-2018, it is $5,920.

How we estimated the number of high school graduates who didn’t complete the FAFSA

Using federal data from the Florida College Access Network, which compiles data for all U.S. states, we looked at how many high school students completed the form from October 2016 to June 2017, the final deadline for most colleges.

Then, using data from the Florida College Access Network, we took into account the total number of high school graduates in each state to estimate the number of graduating seniors who didn’t complete the FAFSA.

How we assessed Pell eligibility for students who didn’t complete the FAFSA

Using 2016-17 Pell Grant-qualifying applicant data from the Florida College Access Network, we estimated the number of graduating seniors who could have been eligible for a Pell Grant if they had filled out the FAFSA. Like the Florida College Access Network, we assumed the rate of Pell-eligible recipients is the same for students who didn’t complete the FAFSA as for students who did.

Pell Grant money left on the table: Full breakdown

State

Percentage of high school graduates not completing the FAFSA

Graduates who didn't complete the FAFSA

Pell Grant-eligible graduates who didn't complete the FAFSA

Average Pell Grant in 2016-17

Total Pell Grant money left on the table

Alabama

41%

20,163

12,130

$3,737

$45,330,172

Alaska

50%

3,894

1,412

$3,359

$4,740,649

Arizona

45%

30,867

18,238

$3,587

$65,411,120

Arkansas

35%

10,787

6,303

$3,815

$24,046,423

California

34%

145,858

90,506

$3,771

$341,309,071

Colorado

41%

23,005

9,847

$3,390

$33,385,782

Connecticut

31%

12,935

5,185

$3,359

$17,417,049

Delaware

28%

2,725

1,256

$3,481

$4,372,471

District of Columbia

35%

1,882

1,173

$3,601

$4,224,699

Florida

39%

69,286

42,086

$3,590

$151,074,877

Georgia

36%

37,653

20,324

$3,461

$70,339,600

Hawaii

38%

5,102

2,350

$3,694

$8,679,968

Idaho

46%

9,237

4,863

$3,644

$17,723,042

Illinois

32%

46,248

22,928

$3,569

$81,820,561

Indiana

32%

23,220

11,405

$3,430

$39,122,014

Iowa

37%

12,818

5,248

$3,464

$18,179,949

Kansas

45%

15,213

7,043

$3,622

$25,506,648

Kentucky

32%

14,510

8,135

$3,672

$29,868,740

Louisiana

31%

13,798

7,662

$3,763

$28,835,492

Maine

37%

5,465

2,648

$3,676

$9,732,639

Maryland

38%

23,611

10,246

$3,361

$34,440,133

Massachusetts

29%

21,332

8,354

$3,651

$30,499,226

Michigan

33%

34,429

16,863

$3,480

$58,676,590

Minnesota

37%

22,585

8,459

$3,278

$27,731,472

Mississippi

29%

8,348

5,572

$4,106

$22,880,240

Missouri

39%

25,950

12,970

$3,548

$46,015,902

Montana

41%

3,903

1,846

$3,792

$6,999,554

Nebraska

36%

8,100

3,752

$3,476

$13,041,185

Nevada

38%

9,007

5,332

$3,438

$18,329,985

New Hampshire

40%

6,170

1,976

$2,412

$4,765,792

New Jersey

31%

32,484

13,644

$3,813

$52,027,694

New Mexico

44%

8,964

5,412

$3,565

$19,291,695

New York

32%

63,567

34,639

$4,022

$139,335,565

North Carolina

39%

39,337

21,964

$3,709

$81,460,288

North Dakota

44%

3,314

1,088

$3,737

$4,067,679

Ohio

37%

45,716

20,425

$3,516

$71,817,817

Oklahoma

44%

18,038

9,985

$3,655

$36,498,744

Oregon

31%

11,363

5,638

$3,506

$19,767,631

Pennsylvania

36%

49,171

21,524

$3,689

$79,411,774

Rhode Island

32%

3,232

1,547

$3,622

$5,603,948

South Carolina

35%

15,777

8,611

$3,709

$31,934,397

South Dakota

34%

2,896

1,145

$3,430

$3,926,651

Tennessee

17%

11,082

6,235

$3,778

$23,553,518

Texas

43%

140,770

85,300

$3,641

$310,584,367

Utah

55%

20,753

10,046

$3,638

$36,544,201

Vermont

45%

3,254

1,313

$3,564

$4,679,098

Virginia

38%

33,582

14,716

$3,570

$52,535,616

Washington

41%

28,034

12,697

$3,639

$46,199,209

West Virginia

32%

5,660

3,080

$3,611

$11,123,470

Wisconsin

41%

26,682

11,147

$3,489

$38,893,711

Wyoming

43%

2,472

997

$3,592

$3,579,797

U.S. total

36%

1,234,249

647,261

$3,583

$2,319,016,315

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