The truth about the FAFSA application

Helpless, insecure, and powerless.

This is how you feel when you complete a FAFSA, and you aren’t alone. In fact, most students rely on student loans to cover college tuition, and all of them start in the same place. FAFSA. But now, the financial aid process is an overwhelming and complex questionnaire circus.

The FAFSA application is a two-syllable nightmare that leaves most college-bound (and their parents) cringing at what it might mean for their finances.

Too many of these families are going through the process of answering hundreds of FAFSA’s personal questions, only to be shot down at the chance of receiving financial aid for college. because FAFSA is a total mess. The entire system is flawed and broken, and yet — it controls your access to paying for college. It’s redundant, confusing, and almost always provides disenchanted amounts compared to what families can actually afford to pay. Its questions have nothing to do with your career plans, the degree you want to obtain, or your future earning potential. Most families go through the tumultuous experience of filling it out, without knowing how the points will add up or against them on the other end. So what’s the point? Is FAFSA even worth doing?

This is going to sting a little, but you should fill out a FAFSA application. FAFSA is the gateway to financial aid and low-cost government loans, so for some students, it’s extremely beneficial. But for most, it’s totally useless. But because of how FAFSA works, don’t hold your breath. Not only is it an over-complicated process with too many questions, but the questions aren’t even related to your career choice. FAFSA should serve as your financial backup, but because most students headed for college fall in the middle ‘gray area,’ it isn’t reliable enough to depend on. FAFSA’s selling point? The Federal Student Aid Office gives out more than $150 billion in grants, loans and work-study funds every year. The reality? FAFSA sees over 21 million applications annually.

The FAFSA application is broken.

Regardless of the degree you want, FAFSA bases your ability to repay student loans on how much money your parents make. Sounds wrong, right? The government has a weird formula for calculating how much your family should be able to ‘contribute’ to your education. It’s called an ‘Expected Family Contribution,’ or EFC.

This amount is calculated using a completely unrealistic and broken formula.

The EFC formula was based off a 1967 family’s budget based on a lower standard of living. Needless to say, it’s the government’s way of deciding how nuclear your family is, more or less. And although it’s adjusted to inflation over the past 50 years, the EFC formula hasn’t shifted to accommodate for current family spending patterns. Which means, the FAFSA application is misleading — because it doesn’t account for your parents actual net income.

Here’s why.

Back in the 60’s, wives didn’t work. Your parents weren’t paying monthly for mobile phone data plans, TV/cable subscriptions, or steep daycare services. Much less, FAFSA doesn’t allow for geographic allowances. So even if your parents are paying a mortgage on a house in New York that costs twice as much as it would elsewhere, the government still bases their expected contribution on their income before expenses.

Many students end up seeing abnormally high EFCs. But in the event of job loss or family illness, your EFC could be reconsidered. Completing a FAFSA is like doing your due diligence, and could open up opportunities to further financial aid from your university. Unfortunately, you can’t depend on it to cover the bulk of your expected cost of learning (which goes way beyond tuition).

We don’t want your FAFSA.

So why does everyone else? Not only is it an overcomplicated process with too many questions, but the questions aren’t even tailored to your career choice or projected income for your degree. According to research completed by the Gates Foundation, applicants answer one-third or less of the FAFSA’s more than 100 questions, either because the formula won’t help, or students don’t know how to answer. And the real kicker? The application uses skip logic, so 30 of FAFSA’s questions are answered less than ONE PERCENT of of the time. If that many questions are answered <1% of the time, these questions should be eliminated. The FAFSA application itself isn’t up to date.

Your parents’ income shouldn’t be the deciding factor for your future.

If Americans went off this standard, there would be no ‘rags to riches’ stories. Every generation would be known as the generation to not have it better than their parents. If your dream is to become a lawyer, but your parents are blue-collar workers in the middle class, your only option is to compete with hundreds of your peers, who were also raised by blue collar workers, for the same few scholarships. This concept is terrifying. We don’t agree with that model, and that’s why we offer a different approach to student loans and borrowing.

In the next decade, two-thirds of our workforce will require education post-high school. But at this rate, America isn’t producing enough college graduates. In fact, it’s estimated that by 2025, America will experience a shortfall of 11 million qualified workers. that’s 11 million positions that require a post-secondary education. So yes, you need the education. But you can’t depend on FAFSA to come through for you.

There’s a better way, and it doesn’t depend on the Office of Federal Student Aid.

Use FAFSA as a safety net, but don’t hold your breath for it to save the day. Most American students won’t qualify for financial aid, and that’s where we come in. We evaluate potential borrowers on several things:

  • The probability of you graduating
  • Your future employability
  • Your ability to repay debts after college.

These sound obvious — but sadly, this isn’t the way the rest of the student loan industry works. The FAFSA application doesn’t see that you have potential, it sees you as a permanent child — forever dependent on the income of your parents. The scariest part about the FAFSA application is that it deters students from getting the education they need. The system is broken, and for many, student loans are the only option.

Education creates opportunities, and you need it to craft that potential into a career and an income. Most student loan companies (government loans included) will underwrite you based on worst-case scenarios. They place liability on your parents and/or grandparents’ income as if you aren’t an adult responsible for yourself.

We offer student loan services based on your potential, not how successful your parents happen to be right before you go to college.

This is the best way to guarantee that you’ll finish college.

We want you to not only go to college but leave with a degree and contribute to the American workforce that desperately needs college graduates. We’re banking on your potential, and we want to invest in your future using a different strategy. And that strategy can’t depend on FAFSA.

Funding University is a private lender that underwrites students based on their chosen career path. Where most lenders depend on FICO scores and cosigners, Funding University’s formula depends on your potential in your chosen field. To learn more, or see if you prequalify, visit