Over $3B in financial aid unclaimed in 2021, researchers find

Brody Serravalli
Fri, 18 Feb 2022 01:44:47 +0000
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An estimated $3.75 billion in Pell Grant money unclaimed by not completing the Free Application for Federal Student Aid. Credit: Courtesy of NCAN

Cash-strapped college students are not known for turning down free money, but new research? suggests they are doing just that.

The study from the National College Attainment Network found that the 2021 freshman class left an estimated $3.75 billion in Pell Grant money unclaimed by not completing the Free Application for Federal Student Aid. According to the nonprofit’s analysis, this is a 60 percent increase in unclaimed financial aid since 2017 — the last data collection.

In Ohio, over $111 million designated for Pell Grants went unclaimed in 2021, with only 56.7 percent of Pell Grant-eligible high school seniors in the state applying, according to the study.

Bill DeBaun, director of data and evaluation at NCAN and co-author of the study, said decreased FAFSA completion rates across the country were largely driven by the pandemic.

“School closures made it more difficult for students to connect with counselors and advisers to get help with filing the FAFSA,” DeBaun said. “Applying for financial aid may also have taken a back seat to the many other priorities these students were juggling, such as caring for younger siblings or working part time.”

University spokesperson Chris Booker said in an email that despite the increase in unclaimed grant money, Ohio State’s FAFSA completion rate among undergraduates has remained consistent at around 72-74 percent for the last three years.

According to the study, low FAFSA completion rates are the primary factors contributing to the increase in unclaimed financial aid. NCAN’s data shows an estimated 54 percent of the high school class of 2021 completed the FAFSA — down from 61 percent in 2017.

DeBaun said the steepest declines they observed were among students from low-income backgrounds and students of color.

“It was unsurprising but still disheartening to see these students more adversely affected,” DeBaun said.

Karen McCarthy, vice president of policy and federal relations at the National Association of Student Financial Aid Administrators, said incoming freshmen often do not apply for financial aid because they incorrectly assume they will not qualify.

“One common misconception is that the FAFSA is only used for federal student aid, but state governments and some colleges and universities use information from the FAFSA to determine what state and institutional aid students qualify for,” McCarthy said.

Booker said Ohio State has a range of initiatives in place to assist students applying for financial aid for the first time.

“Student Financial Aid launches a broad campaign each year for incoming and continuing students that includes multiple emails, signage, videos, and other timely reminders to file the FAFSA by the February 1 priority date,” Booker said.