College Students Lost $3.7 Billion in FAFSA Aid

Posted by Viviana Vazquez in CollegeFebruary 11, 2022(Last Updated July 27, 2022)4 min read
Key Takeaways
  • The National College Attainment Network (NCAN) released a report stating that the number of grants not given to post-secondary students was worth $3.75 billion.
  • This large sum of grants was not given to students because nearly half of the high school graduates did not submit financial aid applications through FAFSA.
  • As a large number of FAFSA applications decreased, some schools made it a graduation requirement for their students to apply for FAFSA.
Are you ready to make some real money moves?

The National College Attainment Network (NCAN) released a report in late January 2022 regarding grants recent high school graduates have filled out. The report found a decline in the number of students who applied for these financial aid programs. Consequently, the drop in the number of students completing the FAFSA application resulted in students essentially turning down $3.75 billion worth of grants. 


What is the FAFSA Application?


The Free Application for Federal Student Aid (FAFSA) is an application for students to obtain federal student loans or grants to fund their higher education tuition. Many colleges and universities, including community colleges, use the FASFA to allocate funds to students using work-study or grant programs. 


Why Students Failed to Fill out the FAFSA Application


Previously, nearly 56% of high school graduates had filled out their FAFSA applications prior to the pandemic. However, once the pandemic hit and all education was forced to be done remotely, the percentage saw a fall to 53%.


The main cause behind fewer FASFA applications being submitted by high school graduates was the absence of in-person classes. Before the pandemic, students had the opportunity to inquire about the application process in person and receive the aid needed to fill out the necessary paperwork. 


Image Credit:


Consequently, the high schools' lack of help provided remotely made it difficult for students to learn and provide the necessary financial information on their applications. This lack of help led many students to abandon the application altogether. 


Schools are Taking Steps to Resolve this Issue


Some high schools understand how crucial the FAFSA application process is to the number of loans their students take out for their long-term part-time or full-time studies. Thus, they have made it a graduation requirement for the students in certain states to fill out their FAFSA applications.


Image Credit:


This solution immensely benefits the students and their mental health, as a more significant majority of them will now have access to funds that will help them finance their education.


How to Apply for the FAFSA


To apply for FAFSA, an applicant must first set up their FSA ID on the website. 

Once they have set up their profile, they can now fill out the application. However, before beginning the application, a few pieces of documentation are needed when filling out the necessary information. 




Typically, to verify your identity, two pieces of identification are required when filling out the FAFSA application. The two pieces of information needed are the Social Security Number and Driver’s License. By supplying two pieces of identification, it is easier to verify the applicant's identity and reduces the chance of fraudulent applications. 


Furthermore, according to the U.S. Department of Education, when filling the EFC portion, if the applicant’s parents are undocumented, they should put 000-00-0000 when filling out the form, 


Tax Returns


The second information required when filling out the FAFSA application is tax returns. The application itself will disclose which year’s tax returns are needed. In addition, there is an IRS tool embedded in the website and application, making it easier and convenient to fill out the tax returns. 


Bank Statements


The FAFSA application also requires copies of bank statements to determine if one is eligible for FAFSA and how many dependents have access to the applicant’s finances. 


Image Credit:


If you wish to view a more extensive checklist regarding the pieces of information needed when filling out the FAFSA application, click here to learn more. 


How FAFSA Funding is Determined


After filling out the FAFSA application, the calculation for funding is based on two determinants: the cost of attendance and expected family contribution. 


The cost of attendance is related to going to a post-secondary institution. This value varies, depending on one’s studies and whether or not they will be living on the college campus. Once one’s school determines this value, the second value required when finalizing the student's funds is the expected family contribution.


The students report their expected family contribution on the FAFSA application, and this value does not change regardless of the institution they apply to. The expected family contribution determines the amount one’s family could contribute when funding a student’s studies.


As a result, the amount awarded to students via grants and loans is the difference between the two values, adjusted for other factors by the school itself.


The Consequences of Lying on a FAFSA Application


Many times the cost of tuition will be too high for families. It may be easy to lie about one part of the application to get higher funding and make it easier to pay for education. However, once a person has been caught lying on their application, they are subject to criminal fraud charges, facing a $20,000 fine and up to 5 years in prison. 


Thus, it is essential to disclose accurate information. If the funding amount is low and will not cover the whole tuition, other alternatives can help one receive the necessary money, such as private loans. 


Having access to education is essential, and no one should be denied or unable to receive access due to financial reasons. Unfortunately, some students had difficulties receiving help with filling out their applications in the past. However, by following the steps listed above regarding how to fill out the application, the financial aid process will become easier.


What are some other ways to receive financial aid if the loans and grants are not enough to pay for tuition? Let us know in the comments below. 


Main Image Credit:

Was this content helpful?
Comments (0)

Sign In to leave a comment.

Download the CapWay App

Access more features to your Money Account

  • Money Goals
  • Request Money
  • Categorize Spending
  • Money Talk

The CapWay, Inc Debit Visa Card is issued by Metropolitan Commercial Bank (Member FDIC) pursuant to a license from Visa U.S.A. Inc. “Metropolitan Commercial Bank” and “Metropolitan” are registered trademarks of Metropolitan Commercial Bank ©2014.

1. For Money Account holders with a negative balance, the CapWay debit card will go into freeze until funds are deposited to bring account back to current. See terms and conditions

2. Sending or receiving money from other CapWay account holders will be instant. Transfers from other accounts could take up to 48 hours, depending on the financial institution.

3. Early access to funds requires direct deposit. Early payment is not guaranteed and is dependent on the timing of payer's submission of deposits. We generally post such deposits on the day they are received which may be up to 2 days earlier than the payer's scheduled payment date.

4. Money Goals allows account holders to save money towards financial goals created within the CapWay platform. Funds can be transferred from your Money Account or saved through the rounding up of your transactions from purchases.

5. CapWay offers financial content through Learn Money free of charge, but may include advertisements through affiliates. Phunds, CapWay's literacy program and session, is paid content or co-branded content.

© 2019-2024 CapWay Inc. All Rights Reserved.