How Students Missed Out on $2.7 Billion in Free FAFSA College Aid

High school graduates missed out on as much as $2.7 billion in free federal grant money in the past academic year, according to a new analysis from NerdWallet. This money went unclaimed mainly because of incomplete or unsubmitted Free Application for Federal Student Aid forms.

Our analysis shows that in 2014, a total of 1,445,732 high school graduates didn’t fill out a FAFSA application. Of those, we believe 747,579 of them would have been Pell eligible: Submitting the FAFSA could have earned them federal Pell Grant money. This figure includes all high school graduates, although some will choose not to attend college immediately or at all. Our calculations included the grads who don’t go on to college to show the scope of students who would be eligible for federal aid if they did apply.

The average amount of money left on the table per eligible high school graduate who didn’t apply was $1,861. The two places with the most unclaimed funds were Mississippi at $2,639 per grad and Washington, D.C., at $2,513. High school graduates also left on the table an average of $2,000 or more in Pell Grant money per grad in Alabama, Arizona, Arkansas, California, Florida, Idaho, Kentucky, New Mexico, New York, North Carolina, Tennessee and Texas.

New Hampshire had the lowest amount of Pell Grant money left on the table per eligible high school graduate with an average of $890. In the 12 other states with the highest FAFSA completion rates, high school grads left, on average, less than $1,500 on the table — Alaska, Colorado, Connecticut, Iowa, Maryland, Massachusetts, Minnesota, North Dakota, South Dakota, Vermont, Wisconsin and Wyoming.

The map below shows statistics by state. Click on a category to change the view.

Via: NerdWallet

What is the FAFSA?

The FAFSA is the key to unlocking college aid, including federal direct loans and Pell Grants, the largest source of federal funds for college. Unlike a student loan, grant money doesn’t have to be paid back. The maximum Pell amount for the 2015-2016 award year is expected to be $5,775, according to the Department of Education. This free money is awarded to undergraduates based on a combination of financial need, college costs and enrollment status. Only students who are eligible for financial aid, as determined by the FAFSA, can be considered for a Pell Grant.

[Ready to fill out the FAFSA now? Use NerdWallet’s free FAFSA Guide for step-by-step assistance and FAQs.]

Incompletion rates among high school students in the U.S. averaged 45% among all states and Washington, D.C. The lowest percentage of incomplete FAFSAs among U.S. high school graduates was 30% in Washington D.C. In 16 states, 50% or more of eligible high school graduates didn’t complete a FAFSA. Alaska and Wyoming had the second- and third-highest percentages of grads who didn’t complete the application — 59% and 58%, respectively.

In Utah, however, 70% of eligible high school graduates did not complete the FAFSA for 2014-2015, the highest among all states. Utah education authorities don’t know exactly why that rate is so high, says Melanie Heath, director of communications at the Utah System of Higher Education. One potential factor, Heath says, is the Beehive State’s higher-than-average number of Mormon students, many of whom graduate high school and then serve two-year religious missions before applying for college, which delays their submission of the FAFSA. Utah encourages these students to apply for college and defer enrollment, but that doesn’t always happen. The Utah System of Higher Education is stepping up efforts to promote FAFSA awareness by hosting application workshops and open houses throughout the state.

Click here to see the full state-by-state breakdown of FAFSA completion and money left on the table.

Some types of aid are disbursed on a first-come, first-served basis, so graduating high school students are advised to fill out the FAFSA as soon as possible. FAFSA season began Jan. 1. If you’re applying, keep track of all the important deadlines you need before the federal deadline on June 30, 2017. Also, the filing start date will change this year: Students will be able to file the FAFSA for 2017-2018 starting Oct. 1, 2016, instead of in January, which has been the traditional start date for the following school year.