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Most families don't know a key date to get financial aid and scholarships for college

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Posted at 7:47 AM, Aug 23, 2022
and last updated 2022-08-23 11:35:26-04

DENVER, Colo. — Are you missing out on free money for college for you or your student? A new report by Sallie Mae found 75% of families don't know a key date to get financial aid for school.

This year, that application opens on October 1, and money is awarded on a first-come, first-served basis. That's why it's so important to apply right away.

“If you're not in line for that aid and you're eligible for it, you could miss out,” said Rick Castellano, the vice president of corporate communications for Sallie Mae.

FAFSA stands for the Free Application for Federal Student Aid.

“It really is the gateway to about $112 billion in federal financial aid,” said Castellano.

Unfortunately, Castellano says about half of students and their families don't fill out the FAFSA because they don't think they qualify.

“Every family, every student is able to complete the FAFSA and should complete the FAFSA for that matter. There's no income limit to completing the FAFSA, and just about every student who completes the FAFSA is going to apply is going to be eligible for some form of aid,” said Castellano.

Every family and student will qualify for different loans, grants and scholarships based on factors like income, the cost of tuition, and how many students in the family are also in college.

Everyone can qualify for something, even middle-income earners making more than $100,000. For grants, students are eligible for anywhere between $4,980 and $10,345 per year, according to savingforcollege.com.

For scholarships and loans, the maximum amount can be in the low tens of thousands of dollars per year.

When filling out the FAFSA, Castellano encourages families to apply for other scholarships outside the application.

Sallie Mae found less than 60% of families use scholarships, with millions of dollars going unused every year.

“The 45% of those who don't apply for scholarships basically say, ‘I don't think I qualify,' or, you know, 'scholarships are really just for the star athlete or the valedictorian.’ I'm here to bust that myth,” said Castellano.

About 6 in 10 students who used scholarships got them directly from their student's school, and those are awarded often by filling out the FAFSA. On average, students receive around $6,335 in school scholarships, but there's more money to be earned.

“Sallie Mae has a free scholarship search that's home to six million scholarships, collectively worth $30 billion. So, we're talking about scholarships for things like skateboarding, for being left-handed, for being over six feet tall,” said Castellano.

Those smaller scholarships add up and can go toward books, housing or meals.

“It's so critical to get in line for that aid early. You don't want to lose your spot in line because that's when that first-come, first-serve money would be left on the table or go to someone else,” said Castellano.

This process should be easier for families moving forward. Congress approved a streamlined online FAFSA with fewer questions. That will go online for the next school year.

To access the FAFSA application, visit HERE on or after October 1, 2022.