As college gets more expensive, families are now able to get financial help sooner than ever before.
For students starting college in the fall of 2017, federal financial aid applications (known as FAFSA) can be submitted as early as Oct. 1, 2016 — three months earlier than normal. Financial aid technology company Cegment says this is great for families who want a better grasp of college costs before committing: Colleges are awarding aid sooner.
Most families say money is among the biggest factors in choosing a school according to Cegment’s new study. “The net cost of a college is increasingly affecting decisions,” the company says.
And most families are planning to take full advantage of the earlier aid. Cegment says more than two-thirds of college-bound students want an understanding of their cost and financial aid earlier, and will lean more toward colleges that provide it.
“Of the respondents planning to apply for aid, 82 percent indicated that they would think more positively about a college that provided earlier insight into their final financial aid award,” the study says.
New dates mean using less-recent income data
Because of the new submission date, FAFSA will be using household income and tax information from 2015 – two years before a student becomes a college freshman. The Cegment study says 90 percent of high schoolers want their award letter earlier, with almost half of those wanting it when they start their senior year. The Department of Education says these new changes will be major benefits to students, and that’s probably true — but it will affect what aid students qualify for.
“The financial aid application process will be more aligned with the college application process,” DOE says. Plus, “there will be more time for students to explore and understand financial aid options and apply for aid before state and school deadlines.”
How are colleges handling the change?
College talk isn’t just for seniors anymore. The Cegment study says half of colleges are planning to target high school juniors for earlier engagement in selecting a school.
“Less selective schools are moving more aggressively to provide awards earlier in the process and embrace early [decision-making], while highly selective colleges are adopting more of a wait-and-see approach,” says Cegment founder Craig Caroll. “Almost everyone in the industry agrees that this is a fundamental change for traditional four-year colleges, which until now have all produced awards at basically the same time.”
Most colleges think the changes will have a significant impact on the enrollment cycle, and 80 percent of institutions believe that colleges and universities who don’t shift their cycles to align “will be at a competitive disadvantage.” That creates an incentive to get families more information sooner.
Clearly college still matters
Americans are facing more than $1 trillion in student loan debt. To avoid huge financial setbacks in the future, families are looking to financial aid to help with college costs so students won’t have to rely so heavily on loans.
Despite financial setbacks, almost 3-in-4 Americans believe going to college is worth it, and that includes those who didn’t attend. Most Americans believe college should be free to anyone who wants it.