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A Positive Sign for College Enrollment — Finally
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Anna Helhoski is a senior writer covering economic news and trends in consumer finance at NerdWallet. She is also an authority on student loans. She joined NerdWallet in 2014. Her work has appeared in The Associated Press, The New York Times, The Washington Post and USA Today. She previously covered local news in the New York metro area for the Daily Voice and New York state politics for The Legislative Gazette. She holds a bachelor's degree in journalism from Purchase College, State University of New York.
Karen Gaudette Brewer Lead Assigning Editor | Core Personal Finance
Karen Gaudette Brewer leads the Core Personal Finance team at NerdWallet. Previously, she guided students and their families through the ins and outs of paying for college and managing student debt on the Higher Education team. Helping people navigate complex money decisions and feel more confident brings her great joy: as the daughter of an immigrant, from an early age she was the translator of financial documents and the person who called the credit card company to fix fraud.
She joined NerdWallet with 20 years of experience working in newsrooms and leading editorial teams, most recently as executive editor of HealthCentral. She launched her journalism career with The Associated Press and later worked for The (Riverside) Press-Enterprise, The Seattle Times, PCC Community Markets and Allrecipes.com.
She is a graduate of the 2022 Poynter Institute Leadership Academy for Women in Media. Her writing has been honored by the Society for Features Journalism and the Society of Professional Journalists. In addition, she’s the author of two books about the Pacific Northwest.
After a two-year slump in college enrollment, there’s at least one early indicator of a reversal ahead: Financial aid application submissions are up.
The latest federal data, tracked by the National College Attainment Network, or NCAN, show 4.6% more high school seniors completed the college financial aid application compared with 2020.
The application, known as the Free Application for Federal Student Aid, or FAFSA, is key to accessing financial aid that includes Pell Grants, scholarships and federal student loans. Rates of completion among high school seniors typically correlate with freshman college enrollment in the fall.
Prior to the pandemic, the FAFSA completion rate was at 53.8% for the class of 2019. But that rate started dipping in 2020 and hit a low of 49.8% among the class of 2021. The latest spring 2022 data on college enrollments also showed a two-year decline of 7.4% (about 1.3 million students), according to data from the National Student Clearinghouse Research Center.
But the most recent data NCAN analyzed show the rate has increased to 52.1% among the class of 2022. It’s a welcome sign for those who fear pandemic-fueled enrollment declines will be permanent.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.59-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1)All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2)As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 11/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
Variable APR
5.34-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1)All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2)As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 11/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.49-15.49%
Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 10/25/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Variable APR
5.04-15.21%
Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 10/25/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Credible lets you check with multiple student loan lenders to get rates with no impact to your credit score. Visit their website to take the next steps.
What’s going right
Boosts in aid applications are highest among schools with high populations of low-income and minority students. Urban schools saw gains, as well. Bill DeBaun, NCAN’s senior director of data and strategic initiatives, says he thinks a more “normal” in-person school experience is making a difference.
“The theory I’m working on is that being back in school reconnected students with a lot of in-school supports,” says DeBaun. By supports, he means in-person interactions with guidance counselors, teachers and peers, which can make the difference between submitting the FAFSA or not.
The five places in the country with the highest completion rates — Louisiana, Tennessee, the District of Columbia, Illinois and Texas — showcase the range of successful approaches.
Tennessee has one of the more successful free college programs, the Tennessee Promise, that requires the FAFSA in order to access. But that might not tell the whole story, since other states, like Washington, also have free college programs but continue to lag in FAFSA completion.
Meanwhile, Alabama, Illinois and Texas have Universal FAFSA mandates that require applications in order to graduate. Texas, the state with the newest mandate, saw a 25.9% increase in completion over the last year. A few other states have mandates, too, including California. Maryland will implement one next year. And Colorado has a grant program to assist students in FAFSA completion.
In Washington, D.C., a districtwide FAFSA initiative supports and encourages public high schools and community organizations to increase aid application rates. There are even awards for the most successful schools.
Keep your optimism cautious
Despite across-the-board gains, the 2022 FAFSA completion rate is still not quite on par with pre-pandemic rates.
And the latest enrollment data from the National Student Clearinghouse Research Center is not yet available. Neither is the latest data on FAFSA renewals. The previously available federal data through Sept. 15, 2021, show 1% fewer renewals for 2020-21 compared with 2019-20, according to NCAN. DeBaun says it’s possible to see this previous dip in renewals bounce back.
Students have been pulled out of the classroom and into the workforce by plentiful entry-level jobs that don’t require a degree and come with higher-than-usual wages, DeBaun says. But those jobs and wages might not be durable in the long run, and at least some of those workers could eventually land back in school.
“Hot economies don’t last forever, and that pendulum will swing back to where we’ll have employees on the margins who will go back to school to retool, to upskill,” DeBaun says.
Employment opportunity isn't the only thing keeping students out of the classroom: A 2022 Gallup-Lumina Foundation study found that among those who were enrolled during the pandemic, but left without a degree, cost was the most significant factor in students’ reasons for not currently attending.
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Completing the FAFSA is crucial if you attend college — even if you don’t think you’ll qualify for need-based aid. You need to submit each year you plan to attend. The FAFSA is open now for fall 2022. The 2023-24 FAFSA form will open Oct. 1.
To complete the FAFSA:
Follow the instructions on StudentAid.gov to create your Federal Student Aid ID.
Gather your documents needed to complete the form (here’s a checklist).
Use the IRS Data Retrieval Tool to transfer your prior-prior year tax information.
