$2.3 billion: The cost of not filling out FAFSA

Pell-eligible students entering college in 2017 missed out on roughly $2.3 billion in federal financial aid because they didn't fill out the FAFSA, according to a report by NerdWallet.

To create the report, NerdWallet compared the number of Pell Grant-eligible high school graduates to the number of FAFSA applications submitted, which helped analysts estimate the number of Pell-eligible students who didn't fill out the FAFSA. Then, NerdWallet multiplied that estimated number of students by the average Pell Grant award to find the total amount of unclaimed Pell Grants.

Analysts found that, while 49% of students in the high school class of 2017 were eligible for a Pell Grant, 36% of all high school graduates failed to complete the FAFSA. Pell-eligible students who didn't complete the FASA forfeited about $3,583 on average.

Why don't students fill out FAFSA? Experts say there are several reasons.

First, the form is relatively long.  Studies from Harvard UniversityStanford University, and the National Bureau of Economic Research have all found that simplifying FAFSA increases low-income students' likeliness to pursue higher education.

How "nudges" can increase FAFSA completion

Second, students may be dissuaded from filling it out by a number of myths about financial aid. They might worry their family income is too high to receive any aid, underestimate the burden of student loans, or believe they'll have no trouble paying back loans once they get their college degree (Hess, CNBC, 10/18; Helhoski, NerdWallet, 10/9).

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