FAFSA in Alabama

Alabama has enacted new legislation requiring high school seniors to complete the Free Application for Federal Student Aid (FAFSA) before graduating from high school. The new Alabama FAFSA requirement took effect during the 2021–2022 academic school year. This document helps guide parents, guardians, and students in making decisions related to completing the FAFSA form.

What Is FAFSA?

The Free Application for Federal Student Aid opens on October 1 each year. The US Department of Education uses the FAFSA form to determine financial aid award eligibility for all college students. Federal financial aid includes federally funded student loans, Pell Grants, and work-study jobs. Because federal funding is provided on a first-come, first-served basis, it is vital to complete FAFSA as soon as possible.

Beginning in 2022, Alabama became the fourth state to require that high school seniors complete FAFSA or satisfy an opt-out option as part of the graduating senior’s transition into postsecondary education, training, or the workforce. This document helps parents, guardians, and students become more aware of the FAFSA mandate in Alabama and the Alabama opt-out option. It also provides guidance and resources to help successfully navigate the FAFSA process.

FAFSA or Opt Out?

In Alabama, parents and students can either complete the FAFSA form or opt out of completing FAFSA. Most people complete FAFSA in 30 minutes or less. It is recommended that students complete the FAFSA form even if they are not sure that they need additional aid. Keep in mind that students and parents are required to complete FAFSA to be eligible for some scholarships and other forms of aid. Some parents, guardians, and students may be unsure if they should complete FAFSA or opt out. This guide provides an overview of the opt-out process, list of considerations, and a FAFSA Decision Flow Chart that can help families make the right FAFSA decision.

Opting Out of FAFSA

In Alabama, a graduating senior may choose not to complete—or opt out—of FAFSA. To opt out a nonparticipation waiver must be submitted. The nonparticipation waiver can be completed by a parent, legal custodian, legal guardian, or a minor legally emancipated or of the legal age of majority. The legal age of majority varies by state and is age 19 in Alabama. Submission of a nonparticipation waiver requires the recommendation of the school principal and school counselor and approval by the local superintendent. The nonparticipation waiver becomes part of the student’s cumulative record. Parents and students can obtain a copy of the nonparticipation waiver by contacting the school staff member designated to counsel students on FAFSA completion, typically the school counselor.

Before Opting Out of FAFSA

Students and parents traditionally decide not to complete FAFSA for seven common reasons.

1. Believe they don’t need financial aid to attend school or college.
2. Believe they are ineligible or may not qualify for financial aid.
3. Do not want to assume debt.
4. Believe they don’t have enough information needed to complete FAFSA.
5. Do not plan to obtain education after high school.
6. Do not know they could complete FAFSA.
7. Believe FAFSA is too time consuming or complex.

Considerations Before Opting Out of FAFSA:

I don’t want or need financial aid.

Some families plan to cover the cost of college by some means other than financial aid. For example, by monies invested in a 529 plan or other college saving plan. In such cases, families may not see the need to complete FAFSA. However, advantages may still exist for FAFSA completion. Many schools use FAFSA to determine both need and merit-based scholarships. If a student receives a scholarship, the amount of the scholarship award can be withdrawn from a 529 plan without penalty. Also, since 529 plans never expire, the plan’s beneficiaries can be changed to pass monies on to another child or even grandchild.

I don’t think I qualify for financial aid.

Some people believe their income is too high to qualify for aid. While aid qualification is influenced in part by parent and student finances, aid is also determined by other factors such as the cost of attendance (COA) at the university or college and the number of students in school. For example, if the cost to attend a school is high, families with higher incomes may still qualify for aid.

I do not want to assume any new debt.

Completing FAFSA does not commit the parent or student to anything. Filing FAFSA will allow the parent and student to determine if the student is eligible for aid and decide whether to accept this full award amount. It’s a good first step to assessing options to attend a college or school without taking on debt.

I do not have the information I need to complete FAFSA or wasn’t aware I could complete FAFSA.

This guide is designed to inform Alabamians about the necessity to complete or opt out of FAFSA and to provide the information and resources needed to complete FAFSA. Several agencies and organizations provide additional assistance to filers. See the Resources & Assistance page at the end of this guide for a list of resources across the state.

I do not plan to obtain additional education after high school.

Many students do not intend to pursue an associate or bachelor’s degree after high school. However, suppose a student believes he or she might like to consider a career and technical program at a community college or trade school. In that case, they should still complete FAFSA to qualify for grants or other forms of financial aid.

I think completing FAFSA is too confusing or takes too much time.

Completing FAFSA takes most filers less than 30 minutes. For tips to reduce completion time by planning ahead, see the FAFSA Financial Aid Timeline section in this guide.

I do not want to disclose personal and financial information.

Completing FAFSA requires parents and students to disclose detailed personal and financial information. This makes some people uncomfortable. The information filers include on the FAFSA form is protected by law. The US Department of Education, which administers FAFSA, can use your information only to further the administering of financial aid, including research. The student’s high school will only be aware that FAFSA is completed. The school will not have access to the information included.

FAFSA Myth Busters

Myth: FAFSA is for low-income families.

Fact: Parents and students do not have to have a low income to qualify for FAFSA. Households with incomes more than $200,000 could be eligible
for some forms of aid.

Myth: FAFSA is only for federal grants and scholarships.

Fact: Grants, scholarships, work-study, and loans are available via the FAFSA process. Low- interest federal loans via FAFSA are often far less expensive to pay back than loans from private lenders. The best part is that parents and students automatically qualify for these loans by completing FAFSA.

Myth: FAFSA is not for students who work to pay for school.

Fact: Many work-study jobs on college and university campuses require completion of FAFSA to qualify for employment.

Myth: FAFSA is only for those who want need-based scholarships.

Fact: Many merit-based scholarships also require completion of the FAFSA form to determine a student’s scholarship amount.

Myth: FAFSA is only for students who plan to pursue an associate or bachelor’s degree.

Fact: Students who are enrolled in or plan to pursue vocational, trade, technical, 1-year or 2-year programs at a community college or other school or training program are eligible for need-based Pell Grants, federal student loans, and other federal student aid by completing FAFSA.

Should I File for FAFSA?

The FAFSA Decision Flow Chart is designed to help parents, guardians, and students decide between the choice to complete FAFSA or opt out of FAFSA by submitting a nonparticipation waiver. Answer the FAFSA Decision Flow Chart questions to determine which option is best for your family.

Back to Student & Family Guide to FAFSA

Portia Johnson, Extension Specialist, Assistant Professor, Auburn University; Kassandra Ross, Clinical Instructor of Marketing, University of Alabama; Emily Hines, Regional Extension Agent, Auburn University

Contributions from Jill Prince, Career Coach Mentor, Alabama Board of Education; Monica Mack, Education Specialist, Alabama Board of Education; Theresa Jones, Regional Extension Agent, Auburn University; Patricia Smith, Regional Extension Agent, Auburn University; Renee Vines, Regional Extension Agent, Auburn University; Cynthia White, Regional Extension Agent, Auburn University

New July 2022, Student & Family Guide to FAFSA, FCS-2639