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Reuters/Rick Wilking
We could have had it all.
THE FINE PRINT

US students are missing out on billions in federal grants because they’re screwing up the forms

By Amy X. Wang

With college tuition costs in the US soaring, students need to grab every bit of free money they can get. Federal grants are an excellent source for that—but nearly 1.5 million Americans may be missing out on them.

As much as $2.7 billion in free federal grants went unclaimed in the 2014-’15 academic year, according to a report released Wednesday (Jan. 27) by personal finance site NerdWallet, which conducts research on the US Free Application for Federal Student Aid (FAFSA). NerdWallet made its calculations based on the number of high school graduates in each state whose financial situations made them eligible for Pell Grants—the largest source of federal college grants—but didn’t complete a valid FAFSA.

The latest numbers are a slight decrease from the $2.9 billion reportedly left on the table in the 2013-’14 year.

So why is all that money repeatedly going unclaimed? The FAFSA is notoriously user-unfriendly, and its confusing nature has drawn the criticism of politicians all over; NerdWallet found an average 45% incompletion rate among US high school students. Entering the wrong social security number, leaving out a divorced parent’s new marriage, and forgetting to sign the form itself are all common pitfalls that can lead to the denial of deserved funds. Low-income families or first-generation college students are especially prone to making mistakes.

“The form can be kind of time-consuming,” Nonso Maduka, an expert on NerdWallet’s financial aid team, tells Quartz. “Many families might have different tax information, and when you’re trying to figure out aid from the government, that can only compound the issue.” Tons of mistakes, he adds, stem from students and families not understanding how to report their own taxes, leading to delays or invalid applications.

Even the US Department of Education has admitted to FAFSA’s problems, estimating an hour for form completion—not counting the time it takes for families to hunt down their tax returns and double-check the accuracy of their information. Although the Obama administration has made strides in improving FAFSA ease-of-use, the payoffs of the changes (which will take effect in the 2017-’18 academic year) are yet to be seen.

What’s clear is that, as it is, students are missing out on huge chunks of money. The maximum Pell Grant amount for the upcoming academic year is $5,775. Because NerdWallet’s analysis includes Pell-eligible high school grads who may not have college plans, Maduka admits that total $2.7 billion figure may be an overestimation—but that doesn’t change the fact that free college funds are essentially being thrown away every year because of a badly-designed form.