The Supply and Demand of Financial Aid

January 22nd, 2009

The lines have been out the door; the requests for help have significantly increased in a short period of time; the demand has increased, but the supply has stayed the same. This is the current financial aid climate, as students and parents rush to get their FAFSA in as soon as possible. And the sentiments throughout the education realm all seem to be the same when it comes to financial aid: the earlier you file, the better your chance is to secure some much-needed cash in a downward economy.

“There is a high level of anxiety and desperation at this time,” says Craig Carroll, CEO of Student Financial Aid Services Inc. (SFAS), a company that he says is a “trusted advisor, helping families across America access available financial aid to pursue their dreams.” According to SFAS, they have seen a huge increase in those applying earlier for financial aid. In fact, says Carroll, SFAS saw a 40 percent increase within the first five days of 2009 as compared to 2008. That’s huge. And, since financial aid is distributed on a first come, first serve basis, the financial aid money will disappear a lot faster this year than in years past.

Christopher Penn, Chief Media Officer at Edvisors, Inc., says that students need to jump on completing the FAFSA as soon as they can. “There are a limited amount of funds from Uncle Sam so the free money is going to run out,” he says. “So do it soon and do it correctly. There are lots of ways to make errors, but the easiest way is by not paying attention.” Penn also explains the great increase he’s seen already. He says that Boston University has seen a 41 percent increase in their mid-year financial aid applications, while the University of Arkansas burned through all their scholarship money in just 11 days.

For some, they are aware of the necessity of filling out the FAFSA early. But, the financial crisis doesn’t seem to be affecting students’ decisions to attend college. For instance, Shayla Price is a first-year law student who hopes her education will better her family. She’s been carefully considering all the decisions she makes on a daily basis. “To ensure my family can afford my education, I am searching for scholarships to pay for my expenses,” she says. “I am also spending less on leisure items […] I feel more pressure to take the burden off of my family; I just want better for us. That’s why I’m pursuing my law education.”

Other students are trying to figure out the FAFSA as quick as possible to ensure they can get the most out of their application. Jeff Marcoux is just finishing up his graduate school applications and is stressing out because both he and his fiancé will be attending school in the Fall. “Our decisions for college are not affected by the current economy because we see the value in attending a tier 1 graduate program due to the ROI [return on investment] once we have our graduate education,” he says. “However, we are VERY concerned about finances and how we are going to afford housing, food, tuition, etc. and are hoping that FAFSA will provide us with enough aid when supplemented with part-time work.”

Both Carroll and Penn give similar advice to students who are concerned about the financial aspects of their education. The earlier you apply, the more of a chance you’ll have to score the cash you need to help you through the process. The demand for financial aid continues to increase, but the supply remains the same. This gives students less of a chance to get the funding they need. So go out now and fill out the FAFSA before it’s too late!

Beyond federal aid, be sure to check out some scholarship stories as well:

• 10 Steps to Scholarship Snatchin’
• Scholarship Strategies That Work
• 10 Scholarship Secrets You Need to Know Now
• 5 Ways to Beat Scholarship Stress

And for a line-by-line helpful guide to completing the FAFSA, check out Penn’s e-book at FafsaOnline.com.

-Amanda Fornecker

Entry Filed under: Budgeting