An annual study has found that high school graduates have missed out on as much as $2.7 billion in free federal grant money this past year as a result of not completing the Free Application for Federal Student Aid.
According to the NerdWallet analysis, 1,445,732 high school graduates failed to fill out a FAFSA application in 2014. Out of this group, an estimated 747,579 of them would have been eligible to receive a Pell Grant. This total includes all high school graduates across the country, although some of them did choose to not attend college, either immediately or at all. The study included these students in order to show how large a group of students would be eligible for the grants if they had applied.
The average amount of money students did not claim by not applying totaled $1,861. Mississippi and Washington D.C. were found to be the two places with the highest amount of unclaimed funds, at $2,639 per grad and $2,513, respectively. Other states where high school graduates have left over $2,000 unclaimed include Alabama, Arizona, Arkansas, California, Florida, Idaho, Kentucky, New Mexico, New York, North Carolina, Tennessee and Texas.
New Hampshire was found to have the least amount of unclaimed Pell Grant funds per eligible student with an average of $890. In all, 12 additional states held the lowest amount of unclaimed funds and the highest FAFSA completion rates, leaving less than $1,500 per student unclaimed. These states include Alaska, Colorado, Connecticut, Iowa, Maryland, Massachusetts, Minnesota, North Dakota, South Dakota, Vermont, Wisconsin and Wyoming.
The FAFSA offers students access to federal direct loans, as well as Pell Grants that do not need to be paid back. The Department of Education reports the highest amount expected to be awarded for the 2015-16 school year to be $5,775. Undergraduates are awarded the grants based on a combination of financial need, college costs and enrollment status.
Among all high school students in the United States, the FAFSA incompletion rate held at 45%. Washington, D.C. was found to have the lowest percentage of incomplete FAFSAs at 30%, while 16 states saw 50% or more of their high school graduates not fill out an application. Alaska and Wyoming held the top two positions for the highest percentage of high school graduates to not fill out a FAFSA at 59% and 58%, respectively.
Experts believe students don't apply because they are under the impression that they are ineligible for the grants. However, no income cutoff exists. The FAFSA4caster is available for use for families to estimate the amount of federal financial aid they can expect to receive as a result of filling out an application.
"A lot of parents feel they won't qualify," says Cora Manuel, assistant financial aid director at Saint Mary's College of California. "They want to know what that hard-and-fast income number is in order to qualify for financial aid, and there never is a hard-and-fast number because of the different variables that determine expected family contribution."
Kevin Fudge, manager of government relations and community affairs for American Student Assistance, says that even if a student does not qualify for financial aid when they initially submit their FAFSA, they may qualify later in the year if a change in income or other special circumstance is reported.