3 FAFSA^® myths debunked

Key takeaways about FAFSA^® myths

• Complete the Free Application for Federal Student Aid (FAFSA^®) even if you think your family earns too much. It’s free to file, there’s no income cap for submitting the form, and income isn’t the only factor that can affect aid.
• Look beyond student loans. The FAFSA^® may help you access grants, work-study, federal loans, state aid, and school-based aid.
• Submit the FAFSA^® every academic year. Your application from a past year doesn’t automatically carry over.
• Check your earliest deadline. Federal, state, and school deadlines are different, and your school may have the earliest one.
• Ask for help when your finances change. If the required tax information no longer reflects your situation, contact your financial aid office after submitting the form.

Three of the biggest FAFSA^® myths are that your family earns too much to qualify for aid, the form only helps you get student loans, and one application covers every year of college. None is true. Income is only one part of aid eligibility, the FAFSA^® can connect you to several types of aid, and you need to submit it for each award year you want aid. It’s also free to complete.

FAFSA^® myths and facts at a glance

Myth 1: My family earns too much to qualify for financial aid

Not necessarily. There’s no income cap for completing the FAFSA^®, and income alone doesn’t decide whether financial aid may be available.

It’s easy to look at your family’s income and assume you already know the answer. But the FAFSA^® collects information about your finances and family situation that schools use when determining your eligibility for aid.

That information is used to calculate your Student Aid Index, or SAI. Your SAI is a number schools use when building your financial aid offer. It isn’t a bill or the amount your family will have to pay.

Schools also consider their cost of attendance and the rules for each aid program. That means two students with similar incomes could receive different offers based on their circumstances, schools, and available aid.

Sallie’s "Financial Aid Myth Report" found that 41% of families believed a household income above $100,000 automatically disqualified them from aid. That belief can stop families from applying before a school has even reviewed their information.

You may not qualify for every type of need-based aid. But that doesn’t mean you should skip the FAFSA^®. Certain federal student loans aren’t based on financial need. States, colleges, and some other aid providers may also use FAFSA^® information when awarding aid.

What to do next: Complete the FAFSA^® and let each school determine what may be available. Filing is free, and you aren’t required to accept any aid you’re offered.  Sallie's step-by-step FAFSA^® guide can help you prepare and work through the form.

Your next step may look a little different if your family’s finances have changed. Because the FAFSA^® uses tax information from an earlier year, it may not reflect a recent job loss, pay cut, large uncovered medical expense, or another major financial change. Submit the required information first, then contact your financial aid office and ask whether it can review your special financial circumstances.

Myth 2: Completing the FAFSA^® only helps me get student loans

There’s much more to it than student loans. Completing the FAFSA^® may help you access several types of financial aid.

The FAFSA^® is used to apply for federal student aid. Its information may also be used by states, schools, and some other aid providers when deciding what you may qualify for.

Your financial aid offer could include a mix of:

• College grants
• Scholarships
• Federal Work-Study
• Federal student loans
• State financial aid
• School-based financial aid

These types of aid don’t all work the same way. Grants and scholarships generally don’t need to be repaid when you meet their terms. Work-study lets you earn money through an eligible job. Student loans are borrowed money and must be repaid with interest.

The FAFSA^® itself isn’t money, a loan, or an aid offer. Think of it as the application that gives schools the information they need to determine what aid may be available to you.

Here’s where this myth can cause trouble: If you think the FAFSA^® is only about borrowing, you may end up skipping it because you don’t want a loan. But that could also mean missing consideration for grants, work-study, or aid from your state or college.

But completing the FAFSA^® doesn’t require you to accept a loan. Your school will send your financial aid offer, and you can decide which parts make sense for you.

A simple way to review an offer is to separate it into three groups:

1. Money you generally don’t repay, such as grants and scholarships
2. Money you earn, such as work-study
3. Money you borrow, such as student loans

What to do next: Look at the numbers side by side before choosing a school.  Compare financial aid offers to help you calculate what you may need to pay after aid.

Myth 3: I only need to complete the FAFSA^® once

One application won’t cover your entire college career. You generally need to submit the FAFSA^® for every award year in which you want financial aid.

Your finances, family circumstances, enrollment plans, school, and available aid may change from one year to the next. Even when your situation seems the same, your school still needs FAFSA^® information for the correct award year.

Sallie’s "Financial Aid Myth Report" found many families believe filing the FAFSA^® once covered all four years of college. But those who miss filing their annual application could miss out on a full year of aid consideration.

Deadlines also change by award year. The federal government, your state, and your school each set their own deadlines. Your school may have the earliest one, and some aid may be limited.

What to do next: Add a FAFSA^® reminder to your calendar each year. Then check:

• When the form for your award year becomes available
• Your school’s financial aid deadline
• Your state’s deadline
• Whether your school requires other forms or documents
• Whether your information or contributors have changed

Check with trusted  FAFSA^® resources to help you prepare for the next time you submit the FAFSA^®.

Skipping the FAFSA^® can mean missing aid opportunities

When you skip the FAFSA^®, you may not be considered for certain federal grants, work-study, federal student loans, state programs, or school-based aid. What you miss will depend on your eligibility, school, state, and deadlines.

The cost of that decision may not be clear right away. Sallie’s "Financial Aid Myth Report" found that nearly one in four families later learned they may have qualified for financial aid they didn’t apply for.

You don’t need to predict your eligibility before applying. Submit the FAFSA^® and let your schools review the information. That gives you real offers to compare instead of making an important decision based on an assumption.

Final thoughts: Don’t let a FAFSA^® myth make the decision for you

The FAFSA^® won’t tell you exactly how much aid you’ll receive the moment you submit it. But completing the form gives schools the information they need to build your financial aid offer.

File every year, meet your earliest deadline, and review every part of your offer before deciding what to accept. Even when the result isn’t exactly what you hoped for, you’ll be planning with better information—and that’s a stronger place to start.