Despite a rebound in federal student aid applications following last year’s troubled rollout of a redesigned form, a new report finds that a large number of students—particularly those from low-income backgrounds—are still missing out on financial aid because they mistakenly believe they don’t qualify.
According to the National College Attainment Network (NCAN), roughly 55 percent of the high school class of 2025 submitted the Free Application for Federal Student Aid (FAFSA)—a notable recovery after the error-prone debut of the new form in 2024. However, that still leaves about 1.6 million graduating seniors who didn’t apply for aid.
A joint analysis released this week by NCAN and Trellis Strategies suggests many of those students might have qualified for federal assistance but never applied because they incorrectly assumed they weren’t eligible.
The findings come from a review of data collected in fall 2024 through the Student Financial Wellness Survey, which surveyed more than 53,000 undergraduates at 104 colleges and universities nationwide.
But the most concerning insight, according to researchers, is who those students are.
The findings were stark:
· 48 percent of students who said they’d struggle to access $500 cited ineligibility as the reason for not completing the FAFSA.
· 41 percent of students who had received some form of public assistance also believed they didn’t qualify for financial aid.
These figures suggest that a significant number of financially vulnerable students are forgoing potential grants, such as the federal Pell Grant, simply because they’re unaware they qualify.
The data is a wake-up call. “Somewhere between 40–50% of lower-income respondents who didn’t file the FAFSA believing they’d be ineligible for aid is a massive, glaring miscommunication to students and families,” researchers wrote. “It’s something our policies, outreach, and advising must urgently address.”
The analysis highlights the importance of clear and accessible information about federal aid eligibility—particularly for first-generation and low-income students. With FAFSA submission rates still recovering from the chaos of last year’s overhaul, advocates say more work is needed to rebuild trust and ensure that students don’t miss out on the financial resources that could make college a reality.