The class of 2022 missed out on $3.6 billion in college scholarships, the report shows

(NerdWallet) – High school seniors have left billions of dollars in free student aid on the table by not completing the Free Federal Student Assistance Application (FAFSA) in 2022. In the class of 2022, 44% of high school seniors skipped FAFSA — and eligible students left $3.58 billion worth of Pell Grant funds — according to a January analysis by the National College Attainment Network, or NCAN.

The need-based Pell Grant is the largest federal scholarship program offered to U.S. students, and 2,022 high school graduates who qualified received an average award of $4,686, according to the NCAN report. A Pell Grant does not have to be repaid; it’s free money.

However, the report contains some caveats. FAFSA undergraduate percentages are based on the entire high school class of 2022, assuming all such students are aspiring to go straight to college. Also, not everyone can fill out the FAFSA. For example, undocumented students are not eligible for federal college aid, including Pell Grants, and are usually blocked by the FAFSA.

The relatively high national FAFSA non-completion rate of 44% in 2022 nonetheless marks an improvement from 2021 – the report’s debut – when 46% of students skipped the application and forfeited approximately $3.75 billion in Pell grants.

The results underscore the work that still needs to be done to stimulate demand for higher education, says Bill DeBaun, senior director of data and strategic initiatives at NCAN.

“The overarching message here is that there is some catching up to do in the post-secondary pipeline,” says DeBaun. “We do not connect all the students that we can with available financial aid.”

Completing the FAFSA is key to unlocking federal, state, and school loans and aid—including Pell Grants, work-study options, and even some private scholarships. You should complete the FAFSA if you are considering pursuing higher education, whether you are currently enrolled in a school or admitted. The application is valid for most types of universities, including community colleges.

College bounds rebound

The slight drop in FAFSA percentages for undergraduate degrees fits into a broader narrative of college applications and attendance rebounding after a pandemic slump.

Freshman enrollment is steadily improving, but remains below 2019 levels. In fall 2022, freshman enrollment increased 4.3% from fall 2021, representing an increase of nearly 100,000 students, according to the latest data from the National Student Clearinghouse Research center.

Regulatory filings suggest the number will increase in the coming year. As of January 1, 2023, nearly 1.1 million students have applied to college for the first time — a 20% increase over the 2019-2020 application cycle, according to Common App, a nonprofit membership organization of universities that facilitates admissions applications. Of these students, applicants from underrepresented minorities increased by 30% and first-generation applicants by 35%.

Not all states are equal

The percentage of high school seniors who did not complete the FAFSA varied widely from state to state.

Alaska, Utah, and Oklahoma had the highest noncompliance rates in 2022 at 65%, 62%, and 57%, respectively. On the other hand, Washington, DC (26%), Tennessee (29%) and Louisiana (31%) had the lowest non-completion rates.

State policy decisions could help explain the discrepancies, DeBaun says. For example, Louisiana was the first state to make completion of the FAFSA a requirement for high school graduation starting in the 2017-2018 school year — although students have some ways to circumvent this, such as getting a college degree. B. Getting a parent to sign a waiver. Tennessee promises all of its high school graduates free community or technical college, but eligibility depends on graduating from FAFSA.

Deadlines for assistance vary

The FAFSA non-participation rates listed in the NCAN analysis could change in the coming months as the high school class of 2022 still has time to complete the FAFSA.

The application for 2022-2023 remains open until June 30, 2023. And college-enrolled students can continue to receive federal grants for the entire current academic year, including Pell grants and direct loans, says Jill Desjean, senior policy analyst at the National Association of Student Funding Administrators.

However, states and universities typically have their own earlier FAFSA deadlines for students to qualify for other types of aid. Many of those deadlines have passed for 2022 high school seniors who enrolled in college last fall.

Complete the FAFSA as soon as possible after it opens, prior to the academic year in which you plan to begin college. The FAFSA for the 2023-2024 school year opened on October 1, 2022.

“The sooner you submit your application the better, but students who miss a deadline shouldn’t just give up,” advises Desjean. “Especially in schools where [students] may be able to apply for an exception to the deadline if they have a valid reason for missing it.