3 Reasons You Should Fill Out the FAFSA—No Matter How Rich You Are

Many middle class families don’t want to bother with the Free Application for Federal Student Aid, known to its friends as the FAFSA, because they have heard that only students from families earning less than about $50,000 get federal grants.

But the FAFSA also qualifies students of all income levels for lots of other financial aid that is awarded no matter how much, or little, the family makes.

Here are three reasons that even the wealthiest families should fill out a FAFSA:

1. To qualify for other kinds of scholarships and grants. Some financial aid programs require a FAFSA even though they award aid without regard to family income. The Tennessee Promise, for example, offers all state residents two years of free tuition at a state community or technical college regardless of income, but it requires a FAFSA to make sure students maximize their federal aid first.

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Some colleges also use FAFSA information as a deciding factor for students who are on the borderline for merit scholarships, says Robert J. Massa, senior vice president for enrollment and institutional planning at Drew University. An admissions officer looking at a student's FAFSA may decide that, "They just miss qualifying based on need, and the student is close to qualifying for merit aid, so let's award a merit scholarship because the family perceives a need" for aid, he explained.

Finally, even affluent families can be “needy” when college costs $65,000 a year. So some colleges, state agencies, and scholarship foundations require the FAFSA to award scholarships and grants to middle- and upper-middle-class students attending expensive schools. The most generous private colleges, for example, award need-based aid to some students from families earning more than $200,000 a year.

2. To get cheap, forgivable federal loans. The FAFSA automatically qualifies the student for low-interest and forgivable federal student loans–the most attractive kind of student loans available. It also is the first step to qualify a parent for a federal parent PLUS loan, which can be used to help pay college costs.

3. To gain an admissions edge. In some cases, filing a FAFSA can actually help a student gain admission to a college, says Lucie Lapovsky, former president of Mercy College and now an educational consultant. Admissions officers know that students hoping for aid who don’t submit FAFSAs to the college are less likely to enroll, she says. So some schools may not want to waste an admissions letter on a student they think is unlikely to attend.