When Jordyn Saul was a freshman at Kent State University, her mother Mindy completed the FAFSA® (Free Application for Federal Student Aid), which includes grants, scholarships, work-study and student loans. Many colleges also require a FAFSA for school-based financial aid.

The only financial aid Jordyn was offered was a $6,000 unsubsidized federal student loan. Mindy ultimately advised her to turn it down: “I didn’t like that the interest would accrue while Jordyn was still in college,” she says. When Jordyn transferred her sophomore year to the State University of New York at Oswego, Mindy completed the FAFSA® again, and again Jordyn only qualified for a federal student loan. Feeling like the process was a “waste of time,” Mindy didn’t bother filing the FAFSA after that.

“I’ve had folks get nothing in federal financial aid but something in state aid, and these are the people who believed they wouldn’t be getting any financial aid.”

Justin Roy, Georgian Court University

Her story is not unique. Increasingly, families are not only turning down financial aid but also opting out of the necessary paperwork to even qualify for it. According to a recent Discover Student Loans survey of parents of college-bound students, only 45 percent completed the FAFSA.

According to Justin Roy, dean of admissions at Georgian Court University in Lakewood, New Jersey, there are misconceptions about filing the FAFSA and what it can mean for you in terms of financial aid. For starters, there are two kinds of federal student loans that students may qualify for — subsidized and unsubsidized. Both loans accrue interest while a student is in college, but with a subsidized loan, the government pays that accrued interest. With an unsubsidized loan, which is what Jordyn was offered, paying that interest is the student’s responsibility.

Secondly, even with someone who doesn’t qualify for federal financial aid, the FAFSA may help them secure state funding. “I’ve had folks get nothing in federal financial aid but something in state aid,” Roy says, “and these are the people who believed they wouldn’t be getting any financial aid.”

According to the U.S. Department of Education (ED), need is determined based on the cost of attendance (COA) at a school minus the expected family contribution (EFC). So when your child attends a more expensive school, the COA is larger and therefore your need could be seen as greater. This could trigger a bigger need-based financial aid package. A recent Forbes article laid out how a family earning $210,000 a year could conceivably qualify for need-based aid at a private four-year college, even though the upper limit for family income to receive need-based aid at a four-year state school is $125,000. The same article notes that college aid formulas expect parents to contribute up to 47 percent of their post-tax income to college costs (and if a parent has more than one child in college, that sum is spread out to cover each child). Most families qualify for some form of financial aid, and as the FAFSA is free to fill out, there is no harm in completing the application.

Some parents also suffer a bit of a shock to find the financial aid package is smaller when their child chooses a state school. Federal grants are need-based, and since state schools are usually less expensive than private institutions, the EFC — which schools use to calculate the aid they give — is smaller. That often results in a smaller aid package. “[Parents say], ‘I got this much aid at a private school. Why didn’t my child get it at a state school?’ And I tell them, ‘You have to compare costs,’” says Roy.

Still, even if your annual family income exceeds $125,000, there are ways to make the FAFSA work for in-state tuition, including with federal student loans. Roy says many families shy away from taking those federal student loans for the wrong reasons. “I’ve had parents divide student loan payments by 60 months, like a car loan, and think, ‘No way can someone with an entry-level job afford that,’” Roy says. But student loans are paid back over 10 to 25 years for federal student loans, and 30 years for federal consolidation loans.

Pell Grants, which tend to go to the neediest families, are another big reason to fill out the FAFSA. These don’t have to be paid back — they’re basically free money — and last year, students missed out on a collective $2.7 billion in free financial aid from unclaimed Pell Grants. For the 2017–2018 school year, the maximum amount for a Pell Grant is $5,920, according to ED.

Lisa Iannucci of Poughkeepsie, New York, has three kids in college, and each one has received Pell Grants over the course of their college education. She admits that the financial aid letter can be confusing, as Pell Grants can be listed on the same page as loans, so some parents may not realize that Pell Grants don’t have to be paid back.

Lastly, parents and students alike tend to ignore a source of income that can come from filling out the FAFSA: federal work-study. According to the National Center for Education Statistics, only 6 percent of undergraduate students earn money through work-study, though 71 percent receive some form of financial aid. Roy says he sees too many students who ignore this option, even when there is $1,500 or $2,000 there for the taking. “It is so interesting because [work study] is based on parental income,” Roy adds. “These are the students who need to make that $1,500 and don’t.”

So your first college lesson? Fill out the FAFSA every year. According to ED, most people qualify for some aid.

FAFSA is a registered service mark of the U.S. Department of Education.