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The #1 Most-Costly Mistake People Make When Paying for College

Here at Nitro, we frequently talk with financial aid officers at colleges and universities around the country.

When we ask them about the biggest mistake people make when paying for college, we hear the same thing over and over: They don't submit a FAFSA.

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FAFSA, otherwise known as the Free Application for Federal Student Aid, is how you can apply for some of the $120 billion in federal grants, loans, and work-study funds given to more than 13 million students every year. So why don’t more people apply?

There are probably two main reasons:

  1.       Some people assume they won’t qualify for aid.
  2.       People may be put off the notoriously long and confusing application.

If these reasons are keeping you from applying for FAFSA, you might not be aware of all the financial aid benefits that FAFSA can unlock for you — and how you may be denying yourself key opportunities by skipping it.

Let’s talk about what FAFSA can do for you, and how you can take some of the pain out of the application process.

See also: 11 Common FAFSA Mistakes that Can Cost You Money

How FAFSA works

If you’re not entirely sure what FAFSA is or how it works, you’re not alone.

Because FAFSA has “federal” in the name, many people believe that FAFSA only deals with federal aid. Seems logical, but it's not true. In fact, FAFSA is your gateway to a lot of state and school-specific aid as well.

To understand why, it's helpful to know how FAFSA works. Let's break it down:

  1. After you apply for FAFSA, the federal government processes your application and determines your expected family contribution (EFC), based on the income information you provided. 
  2. You’ll receive your EFC on your Student Aid Report (SAR), which you’ll get about two weeks after you fill out your FAFSA. However, your SAR won’t tell you a whole lot about the aid that you’re eligible for. That info will come later.
  3. Your FAFSA will be shared with the colleges you apply to. Those colleges and universities will evaluate you for aid based on your EFC. The schools that accept you will send you a financial award letter, which will usually arrive not long after you receive your acceptance.  

Your financial aid award letter spells out how much money you can expect to receive from:

  • Federal grants, including the Federal Pell Grant
  • Federal subsidized and unsubsidized loans
  • State grants and scholarships
  • School-specific grants and scholarships, and
  • Work-study programs

Remember that you can always apply for additional financial aid from other sources to reduce your costs even further. (See our state-specific guides to financial aid to learn more.)

See also: 4 FAFSA Tips for Students with Divorced Parents

Taking the pain out of FAFSA

Many people find filling out the FAFSA somewhat painful. It's a long form with a lot of detailed questions. That’s why we’ve created a question-by-question guide to help you fill out the application.

FAFSA applications are accepted as early as October 1. You'll want to apply as soon as possible. Some scholarships and grants are given out on a first-come, first-served basis, and you don’t want to miss out on aid you'd have been eligible for because you applied later than most people.

Tip: You don’t have to know for sure which schools you’re applying to in order to fill out the FAFSA, so there’s no need to wait. You can update that information later. 

Remember, FAFSA is the key to unlocking multiple sources of financial aid. Don’t leave college money on the table by not applying. 

If you still need additional funds for college after exhausting your resources for grants, scholarships, and federal loans, check out our guide to the best lenders for private student loans.

Additional Nitro Recommended Student Loan Lenders

Lender Rates (APR) Loan Types Terms Eligible Degrees Eligible Loans  

Sallie Mae

3.37% - 13.72%1 Variable & Fixed
10 - 15 years

Undergrad Students Learn More

View Disclosure

Ascent

2.52% - 14.75%1 Variable & Fixed
5 - 15 years

4

Undergrad & Graduate Students Learn More

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Earnest

2.55% - 12.78%1 Variable & Fixed
5 - 15 years

3

Undergrad & Graduate Student & Parent Learn More

View Disclosure

SoFi

2.99% - 13.60%1 Variable & Fixed
5 - 15 years

Undergrad & Graduate Student & Parent Learn More

View Disclosure

FundingU

6.99% - 12.99%1 Variable & Fixed
10 years

Undergraduate No-Cosigner Student Loan Learn More

View Disclosure

MPowerFinancing

7.52% - 14.98%1 Fixed
10 year only

Undergrad & Graduate Student Learn More

View Disclosure

Rates (APR) 3.37% - 13.72%1
Loan Types Variable & Fixed
Terms 10 - 15 years

Eligible Degrees Undergrad
Eligible Degrees Students
Rates (APR) 2.52% - 14.75%1
Loan Types Variable & Fixed
Terms 5 - 15 years

4

Eligible Degrees Undergrad & Graduate
Eligible Degrees Students
Rates (APR) 2.55% - 12.78%1
Loan Types Variable & Fixed
Terms 5 - 15 years

3

Eligible Degrees Undergrad & Graduate
Eligible Degrees Student & Parent
Rates (APR) 2.99% - 13.60%1
Loan Types Variable & Fixed
Terms 5 - 15 years

Eligible Degrees Undergrad & Graduate
Eligible Degrees Student & Parent
Rates (APR) 6.99% - 12.99%1
Loan Types Variable & Fixed
Terms 10 years

Eligible Degrees Undergraduate
Eligible Degrees No-Cosigner Student Loan
Rates (APR) 7.52% - 14.98%1
Loan Types Fixed
Terms 10 year only

Eligible Degrees Undergrad & Graduate
Eligible Degrees Student

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