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Household appliances are becoming more modern and high-tech, but they don’t last like they once did, experts said. 
Here are the best ways to save when it comes to replacing those big-ticket items.

Customers look at appliances for sale at a Best Buy store in Miami, Florida, Oct. 8, 2021.
Joe Raedle | Getty Images

Sara Rathner didn’t want to replace her clothes dryer. But a part was clearly broken, causing the machine to make a high-pitched squealing sound every time she dried a load of laundry. 
“We called an appliance repair company and he came and he replaced the component,” said Rathner, a travel and credit cards expert at NerdWallet who lives in Richmond, Virginia.

However, the machine broke for the same reason again a few months later, and then again shortly after that. After the mechanic’s third visit, Rathner said he told her, “You need to stop calling me and just buy a new dryer. I cost you $250 every time I show up. One more visit, you could have just bought a new dryer.”
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‘The appliance upgrade cycle has shortened’

Household appliances are becoming more modern and high-tech, but — as Rathner found — they don’t last like they once did. 
In fact, homeowners are purchasing large appliances, including washing machines, dryers, dishwashers and refrigerators, more often compared with 15 years ago, according to an analysis by Zonda Media, a housing market research and analytics firm.
From 1995-2005, the average homeowner replaced appliances consistently every 12 to 13 years. Today it is every eight to nine years, noted Todd Tomalak, Zonda’s principal of building products research.

At the same time, they are spending more than before.

Homeowners spend about 34% more on appliances than they did 15 years ago, “above and beyond inflation,” Tomalak said.
“Homeowners are purchasing appliances with more bells and whistles, but which become obsolete sooner and have more aspects to repair versus appliances years ago,” he said.
“As a result, the appliance upgrade cycle has shortened.”
As prices continue to rise while the quality of some products further degrades, shoppers will need to make trade-offs on how to spend their income, said chartered financial analyst Brian Laung Aoaeh, co-founder and general partner of Refashiond Ventures, a supply chain technology venture firm based in New York. 
“There will be some [products] on which you don’t want to compromise on quality so you might be willing to pay a bit more … and then there might be certain things you decide ‘I don’t need this,'” he said.
So, Aoaeh said, as a shopper, try to ask yourself this question: “In the things that you consume, where do you absolutely need the best quality?”

How to save on big-ticket purchases

While most consumers would struggle to cover a $1,000 unexpected expense, there are ways to spread out the cost of replacing a big-ticket appliance that breaks without warning. Otherwise, if your fridge or washing machine is on its last legs, seasonal discounts and credit card rewards can help you save.
1. Buy Now, Pay Later may work in your favor: Buy Now, Pay Later programs can smooth out your budget, Rathner said. These loans cut big-ticket items into static monthly payments, but it can be tricky if you have more than one plan running at the same time. “If you don’t plan carefully, you might risk overdrawing your account because you’ve got too many of these plans going on at once.”
2. Seasonal sales can help cut the cost: If you have the time to shop around and plan for this purchase instead of an emergency situation, you can take advantage of seasonal sales, Rathner said. “All major holidays have sales for things like appliances: July Fourth, Memorial Day, Labor Day, Black Friday, of course.”
3. In-store financing may be available: “You can also see if the store that you’re purchasing the item from offers any sort of financing that might be favorable for you,” Rathner said. Some large retailers still offer old-school layaway programs, for instance.
Retail credit cards can also give shoppers benefits such as discounts and early access to sales. Some include a “deferred interest” or a 0% interest retail card that gives customers roughly six to 12 months to pay off a big purchase. Make sure to pay off the item within the time frame; if not, you will be saddled with interest on the full amount you charged.
4. Credit cards can offer perks: You might be able to reap the rewards if you use a credit card that offers benefits such as a sign-on bonus, which often requires the cardholder to hit a high spending minimum, said Rathner. “If it’s a sign up bonus that’s attainable to you and you have one of these major appliance purchases coming up anyway that you’ve been planning for, then the timing can work out in your favor,” she said. Make sure to pay off the card balance by the due date; otherwise, the high interest rate fees will be added on.
Also, consider researching cards that offer warranties as a benefit: “That will add an extra year on top of the manufacturer’s warranty as well,” she said. Make sure the warranty covers the appliance you’re shopping for. More

A shift from pensions to 401(k) plans has made it so retirement savings is a worker’s responsibility.
Yet, new research finds most individuals say pensions are essential for achieving the American Dream.

A United Auto Workers union member holds a sign outside the Stellantis Sterling Heights Assembly Plant to mark the beginning of contract negotiations in Sterling Heights, Michigan, on July 12, 2023.
Rebecca Cook | Reuters

Many Americans long for the days when companies guaranteed workers income in retirement.
That includes Sara Schambers, a fourth-generation Ford auto worker and member of the United Auto Workers union, who saw her grandparents retire with financial security. But after obtaining a permanent position in 2012, the same benefits have not been available to her.

“Without a pension and post-retirement health care, you have people leaving this company after 30 years’ service with nothing more than a, ‘Have a nice day, hope the stock market doesn’t crash,'” Schambers told Senate leaders during a hearing in Washington, D.C., on Wednesday.
Ford did not immediately respond to CNBC’s request for comment.

More than three-quarters of Americans, 77%, say the unavailability of pensions is making it harder to achieve the American Dream, according to a new report from the National Institute on Retirement Security.
Meanwhile, 83% say all workers should have a pension to be independent and self-reliant in retirement.

How the move from pensions to 401(k)s affects workers

Over the past four decades, nongovernment employers have been shifting from providing pensions, otherwise known as defined benefit plans, to defined contribution plans such as 401(k)s.

Pensions typically pay lifetime retirement benefits based on factors such as an employee’s salary and years of service. The employer takes responsibility for the investments made on the employee’s behalf, including the risk as to whether adequate funds will be available to pay the benefits owed. Pension employees traditionally receive steady monthly checks once they retire, though plans may offer lump-sum distributions.
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In contrast, 401(k)s and other defined contribution plans mostly require employees to oversee their contributions and investment selections. While employers may help with matching contributions or features that automatically nudge employees to save more, the amount of income employees may ultimately receive as income in retirement is unknown.
With the shift from pensions to 401(k)s, the responsibility for saving for retirement has transferred from employers to workers.
Yet, some research suggests workers still fare best when the responsibility for retirement savings falls on the employer.

‘Workers want to have the choice to retire or not’

Most Americans, 79%, now say the U.S. is facing a retirement crisis, up from 67% in 2020, according to the NIRS.
The median retirement savings for all households is just $39,000, according to Teresa Ghilarducci, professor of economics at The New School for Social Research and author of the book, “Work, Retire, Repeat: The Uncertainty of Retirement in the New Economy.”
A lack of adequate retirement funding has forced many Americans to work longer.
“Workers want to have the choice to retire or not, and they can only do that with good pensions,” Ghilarducci said at an NIRS event on Tuesday.

Yet, others argue the switch to a defined contribution system has been successful in helping Americans build wealth.
Americans have amassed $41.5 trillion in inflation-adjusted retirement assets, an increase of 330% over the past 35 years, noted Rachel Greszler, senior research fellow at The Heritage Foundation, a conservative think tank.
“When not managed properly, defined benefit plans can end up like Ponzi schemes,” Greszler said at Wednesday’s Senate hearing.
Neither Social Security nor multiemployer pensions can pay benefits as promised, she noted. Social Security’s trust funds face insolvency in the next decade, which may prompt across the board benefit cuts of more than 20% if Congress does not act sooner.
To shore up Social Security, the average American household would have to pay at least $3,000 per year more in taxes, money that would better be invested in personal accounts, Greszler argued.
At the Senate hearing, Sen. Bill Cassidy, R-La., pointed to another reason why a move to pensions may not necessarily be best for today’s workers. Those benefits offered by the federal government include a vesting period of five years, which may preclude workers who switch jobs frequently — or who are laid off by their companies — from participating. Defined contribution plans such as 401(k)s, however, are portable from job to job.

A return to pensions?

Some employers are considering a return to pensions, notably with IBM shifting from a 401(k) match to a defined benefit contribution.
Yet, “only a handful” of other major companies would be likely to follow IBM’s lead to reopen their defined benefit plans, a recent analysis from the Center for Retirement Research at Boston College found.
Still, that isn’t stopping Schambers, the auto worker, from hoping to have pensions reinstated in the next round of union contract negotiations.
“Our next UAW contract expires in 2028,” Schambers said. “And we’re ready to fight like hell for real retirement security, for a pension and post-retirement health care.”Don’t miss these stories from CNBC PRO: More

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Largely as a result of the wealth gap, women tend to be more financially vulnerable than their male counterparts.
Even a small cash reserve can provide security, according to writer Paulette Perhach, who coined it a “f— off fund.”
Here’s how to build your own.

There’s a wealth gap between women and men that has been stubbornly hard to shake.
Gender pay gaps have persisted despite women’s increasing levels of education and representation in senior leadership positions at work. Women are still more likely to take time out of the labor force or reduce the number of hours worked because of caretaking responsibilities, often referred to as the “motherhood penalty.” 

That contributes to a growing wealth discrepancy, which is difficult to escape, according to Stacy Francis, a certified financial planner and president and CEO of Francis Financial in New York.

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Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

Largely as a result of the wealth gap, women tend to be more financially vulnerable than their male counterparts. Regardless of their household income, 93% of women feel stress when it comes to money, according to a new report by Fidelity Investments.
Other reports show that many American women stay in marriages that are unhealthy and even border on dysfunctional due to financial insecurity.
Even in the healthiest relationships, women are likely to outlive men, Francis says, which is why she advises her female clients to consider that at some point, “They are going to be on their own.”
“Most all of us are going to be in the driver’s seat of our finances alone in the car at some point,” said Francis, who is also a member of the CNBC Financial Advisor Council.

While the benefits of saving are clear, for women, the ability to be independent is particularly powerful.

The benefit of a ‘f— off’ fund

In a viral 2016 Billfold piece, writer Paulette Perhach outlined the security that even a small cash reserve can provide. She recommended building up some savings that could be tapped even in a non-emergency and coined it a “f— off fund.”
“Whether the system protects you or fails you, you will be able to take care of yourself,” Perhach told CNBC. “It’s about creating options.”
In fact, financial stress levels drastically decrease with each additional month of emergency savings set aside, according to Fidelity. Roughly 81% of women with no emergency savings felt a fair amount or a lot of stress. Once women have three months’ worth of emergency savings, only 26% report high stress levels, Fidelity found.

How to build a cash reserve

Most financial experts recommend having at least three to six months’ worth of expenses set aside, or more if you are the sole breadwinner in your family or in business for yourself.
To get there, “start with baby steps,” Francis said.
“The best thing you can do is make room in your budget to have that money go toward your emergency fund in a consistent and sustainable way, so you don’t find yourself strapped,” Francis said.
Lorna Kapusta, head of women and engagement at Fidelity, suggests creating a budget with three main ‘buckets.’ The goal is to put 50% of your income toward essential expenses, such as rent, food and utilities, another 15% toward retirement and 5% in an emergency fund, she said. The remaining 30% provides a cushion for a higher cost of living or other discretionary spending areas.
Even if you can’t reach those savings targets at the outset, commit to putting something in a high-yield account, many of which now pay more than 5% — the most savers have been able to earn in nearly two decades — and aim to increase it over time, she advised.
Similarly, contribute enough to your 401(k) to at least get the full employer match. Then, opt to auto escalate your contributions, which will steadily increase the amount you save each year. 

Once an emergency fund is off the ground, most experts recommend meeting with a financial advisor to shore up a long-term strategy. Many employer-sponsored plans now offer counseling or one-on-one coaching. There’s also free help available through the National Foundation for Credit Counseling.   
“One of the things that I talk to my clients about is the importance of establishing a personal financial plan,” said Judith Lee, senior vice president and wealth management advisor at Merrill Lynch. “Having a plan gives them a roadmap in terms of where they are right now and their individual goals.”
Ultimately, that money roadmap is key to feeling empowered, she added. “The specific choices one makes about savings and spending has an impact,” Lee said. “The discipline it takes to save is an acknowledgement to ourselves that we are worth the sacrifice.”
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Half of women said they were reluctant to talk about money because they consider it a private topic, compared to 41% of men, according a new survey from Wells Fargo.
The only money topic women were less reluctant than men to talk about is how much they earn.

Talking about personal finances is harder than talking about religion, politics or death — and almost as hard to talk about as sex, a new survey finds. And women are more likely than men to find talking about money difficult.
Half of women said they were reluctant to talk about money because they consider it a private topic, compared to 41% of men, according to the survey, from Wells Fargo in partnership with Versta Research. Feeling judged was another top-cited reason, for 35% of women and 31% of men. 

The only money topic women were less reluctant than men to talk about is how much they earn, the survey found. Men were more open to talking about their savings, debt, specific investments, spending habits and money mistakes, among other topics.
Wells Fargo polled 3,403 U.S. adults and 203 teens between September 5 and October 3, 2023.

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Why personal finance is a taboo topic

Asked to rank conversations on their difficulty, 60% of respondents said it was difficult to talk about sex, while 57% said personal finance was difficult to discuss. To compare, 40% said it was difficult to talk about politics, 29% religion, and 28%, their personal health.
When asked directly about the difficulty of talking about sex compared to finances, 47% said having an open and honest conversation about their money is more challenging than discussing their romantic life. Privacy, not wanting others to know how much or how little they have and feeling judged were top reasons people cited holding them back from talking about their money. 
“When you think of money taboos and this idea that talking about money and talking about sex are actually almost the equivalent in their difficulty, it really just highlights the taboos that sometimes hold us back,” said Michael Liersch, head of advice and planning for Wells Fargo. 

“We really need to ask ourselves, what’s holding us back from getting the information we need to be successful on our own terms,” said Liersch.
The survey also found generational differences in how women feel about money discussions. More than half, 53%, of Gen Z women ages 14 to 26 said feeling judged made them avoid talking about money, versus 35% of women across all generations.
“Women are often penalized for traits their male counterparts receive applause for,” said Lindsay Bryan-Podvin, a financial therapist based in Ann Arbor, Michigan. “When it comes to money, we are fearful that if we advocate for ourselves, such as asking for a raise or negotiating down a too-high car insurance payment, we’ll be met with hostility.”

‘There really are no stupid questions’

John Howard | The Image Bank | Getty Images

To help boost our comfort level with talking about money, experts say, consider how conversations are framed. That can help you reduce feelings of judgment, or that your ideas are wrong.  
“People feel like they’re stupid questions, but there really are no stupid questions when it comes to [finances],” said Liersch, who holds a Ph.D. in behavioral science.
Although talking about money with friends and family can be challenging, look for ways to naturally weave it into the conversation, said Bryan-Podvin, who is the founder of Mind Money Balance.
“Most people crave having someone to talk about money with but are wary of bringing it up,” she said.
“Try, ‘I’ve got my performance review coming up. Any tips on making sure I get my full merit-based raise?’ or ‘I saw you went to the Bahamas recently! It looked so fun! How did you save up for it?'”
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A Harvard Business School graduate tricked his fellow alumni and associates into investing at least $2.9 million in a Ponzi scheme, New York Attorney General Letitia James said.
James’ office said it had secured a court order blocking the grad, Vladimir Artamonov, “from harming investors through his fraudulent scheme.” Artamonov allegedly projected returns of 500% to 1,000% by claiming to learn which investments Berkshire Hathaway planned to make.
James’ office said it learned of the fraud when it was told about an investor who ended his own life after discovering he had lost $100,000 in Artamonov’s alleged scheme.

A general view of the Baker Library/Bloomberg Center on February 17, 2024, at Harvard Business School in Allston, MA. 
Erica Denhoff | Icon Sportswire | Icon Sportswire | Getty Images

A Harvard Business School graduate tricked his fellow alumni and associates into investing at least $2.9 million in a Ponzi scheme he ran, New York Attorney General Letitia James said Thursday.
James’ office said it had secured a court order blocking the grad, Vladimir Artamonov, “from harming investors through his fraudulent scheme,” which allegedly projected returns of 500% to 1,000% by claiming to learn which investments Berkshire Hathaway planned to make.

The order in Manhattan Supreme Court also bars Artamonov from withdrawing and transferring funds in his bank and brokerage accounts.
Artamonov allegedly lured at least 29 investors into the scheme, most of whom he met through his connections to the elite college, the attorney general said.
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James’ office said Artamonov lost millions of dollars in investors’ funds by buying short-term options but did not disclose his losses, instead using new money invested with him to repay existing investors.
“Artamonov also used his investors’ money to fund unauthorized personal expenses for vacations, shopping, and dining,” the office said.

James’ office said it learned of the fraud when it was told about an investor who ended his own life after discovering he had lost $100,000 in Artamonov’s alleged scheme.
Even after the man’s suicide, Artamonov continued soliciting new investors, lying to them about the fund’s strategy and performance, James’ office said in a statement.
“Even sophisticated investors can be conned by fraudsters, especially when personal relationships and networks are used to build a false sense of trust,” James said.
“Vladimir Artamonov used his alumnus status from Harvard Business School to prey on his classmates and others while seeming legitimate and dependable. Instead, he has been scamming people out of their investments, with horrific consequences.”
Artamonov did not immediately respond to requests for comment.
Mark Cautela, head of communications at Harvard Business School, told CNBC in an email: “We just found out about this earlier today. We have no additional comment.”

Artamonov, who James’ office said graduated from the business school in 2003 with a master’s degree, previously worked in New York as a securities professional.
James’ office said that from September 2021 up to the present, he solicited at least $2.9 million from at least 29 investors for an investment fund dubbed “Project Information Arbitrage” or the “Artamonov Fund.”
“Artamonov identified many of his investors through the HBS alumni network,” the AG’s office said. “Many of his investors did not have a close personal relationship with him and only knew him as an acquaintance.”
The office said “Artamonov lured clients by claiming that he could learn which investments Berkshire Hathaway would make ahead of the market by examining public state insurance filings.”
“Artamonov boasted to his investors that it is like ‘having a private time machine’ and ‘getting tomorrow’s newspaper today,'” as he projected massive investment returns, James’ office said.
But in reality, the office said, Artamonov used the investors’ funds to purchase short-term options which expired within days of purchase “and appeared to have no relation to Berkshire Hathaway or its investment activities.” More

Nearly a third, 31%, of homebuyers and sellers negotiated with their agents and a majority of those, 64%, successfully reduced their fees, according to a new report by LendingTree.
Many buyers and sellers are unaware they have this option, as real estate agent costs are often “not at the forefront” of their minds, said Jacob Channel, a senior economist at LendingTree.
Here’s how real estate agents help you in the housing market and how to negotiate with them.

Fuse | Corbis | Getty Images

When you buy or sell a home, your real estate agent’s commissions can trim thousands of dollars off the sale price — but many consumers don’t realize you can negotiate those terms.
Nearly a third, 31%, of homebuyers and sellers negotiated commissions with their agents, according to a new report by LendingTree. A majority of those, 64%, successfully reduced the fees. LendingTree polled 2,034 U.S. adults in mid-January.

About 36% of homebuyers and sellers say they didn’t know they could negotiate a real estate agent’s commission.
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That’s understandable: When buyers are budgeting costs for a new property, they often focus on the bigger things, like the down payment and the mortgage, said Jacob Channel, a senior economist at LendingTree.
“Real estate commission fees are one of the sort of less glamorous or less talked out parts of the homebuying process,” said Channel.
“Thoughts like how much a real estate agent’s going to get paid or who pays the real estate agent probably aren’t at the forefront of your mind,” he said.

How real estate agent commissions work

In 2023, the average commission was 5.37%, LendingTree found. Rates typically range from 5% to 6%, translating to thousands of dollars and the earnings are usually split evenly between the buyer and seller agents involved with the transaction. The seller typically pays those commissions at closing.
The median home sale price by the end of 2023 was $417,700, according to the Federal Reserve. That would mean commissions at a 5.37% rate amount to $22,430.49.
Yet 48% of homebuyers and sellers didn’t know how much their agent received in commission for their latest home transaction, according to LendingTree.
“The homebuying and selling experience can be so overwhelming,” said Channel. “Unless you’re paying close attention, it’s kind of hard to come up with an itemized list of what exactly you spent and where exactly you spent it.”

Some home sellers avoid these fees entirely by selling the home on their own. So-called for sale by owner homes represented 10% of home sales in 2021, according to the National Association of Realtors.
Technology has made it easier for Americans to buy and sell properties on their own through online marketplaces. But they may end up putting in more time and energy than they initially anticipate or make the process even more complicated, Channel said.
“[Real estate agents] are doing a lot of work behind the scenes that isn’t necessarily [or] immediately apparent to sellers and buyers,” he said.
Agents are often familiar with local housing market trends, know how to sell a property for a higher price and are familiar with the necessary paperwork involved in the transaction, said Channel.
“All housing markets have their own individual quirks,” he said. “If you’re a seller and you try to do it on your own, you might miss something or … not position yourself in a particularly strong way to get a good deal to sell your house for as much as you could.”

How to negotiate real estate agent fees

While real estate agents must be upfront with their fees, buyers and sellers should make sure to ask questions about what they are charging and why. An agent’s rate often depends on factors like the property type and how easily they think it will sell.
Keep in mind that agents’ “livelihoods depend on the commission fees that they make,” said Channel.
If you find an agent you like but worry about the cost, see if you can come to an agreement or reach a discount. You may have more leverage to negotiate if your home is desirable, has a high value or if your local market is hot.
Look into different agents in your area and compare their fees. So-called low-commission agents may offer fewer services, but charge commissions as low as 1% to 1.5%. Others work on a flat-fee basis.
If you’re working with a dual agent, or a real estate agent who’s representing both the buyer and seller, you might point out to them that they don’t have to split the commission with anyone. Even with a slightly lower rate, they’re more likely to take home more money if they had split 5% with a second agent, said Channel.

Antitrust lawsuit may have ripple effect on fees

As of now, the home seller is responsible for paying both their agent and the buyer’s. But that could change if a lawsuit stands.
In an antitrust lawsuit last fall, a federal jury found the NAR and several large real estate brokerages had conspired to artificially inflate agent commissions. As a result, the NAR, Keller Williams and HomeServices of America are liable for nearly $1.8 billion in damages. Re/Max and Anywhere Real Estate settled before the trial, each paying damages.
“Last month, NAR filed motions asking the Court to set aside the trial verdict and enter judgment as a matter of law in favor of NAR or, at the very least, order a new trial. These motions are part of the post-trial process, and we expect rulings on them in due course,” a spokesperson from NAR told CNBC in a statement.

A spokesperson on behalf of HomeServices of America declined to comment.  
Keller Williams settled for $70 million in early February.
If the verdict stands, it could mean that a home seller won’t be required to pay the buyer’s agent, experts say. More buyers may bypass agents, or try to negotiate fees.
“Hopefully, this will give us even more transparency,” said Channel. “This goes to show … why it’s so important to pay attention to all the costs when you go to buy or sell a home.”
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The IRS on Thursday unveiled plans to target wealthy “non-filers” with a new round of compliance letters.
Non-filers making between $400,000 and more than $1 million with unfiled federal returns from tax years 2017 to 2021 will receive the initial round of letters.
The agency urges recipients to take “immediate action” to avoid more letters, higher penalties and “stronger enforcement measures.”

IRS Commissioner Daniel Werfel speaks during an IRS event in McLean, Virginia, on Aug. 2, 2023.
Alex Wong | Getty Images

The IRS has unveiled plans to target “non-filers” with a new round of letters, starting with high-income taxpayers who haven’t filed federal returns since 2017.
Starting this week, the agency will send letters to wealthy non-filers, with the first batch going to those earning $400,000 to more than $1 million.

Formerly known as CP-59 notices, the letters will go to between 20,000 and 40,000 non-filers per week, according to plans announced Thursday. The IRS said recipients should take “immediate action” to avoid more letters, higher penalties and “stronger enforcement measures.” Non-filers can learn more about past-due returns here.
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“If someone hasn’t filed a tax return, this is the time to make it right,” IRS Commissioner Danny Werfel told reporters during a press call. Citing staffing issues, he said the non-filer program has only run sporadically since 2016.
The failure-to-file penalty is 5% of the amount owed per month, capped at 25% of the tax bill, according to the IRS. There’s also an interest-based penalty based on the current interest rate.
The agency urges non-filers to work with a tax professional to file past-due returns and calculate taxes owed, penalties and interest.    

‘Historically low audit rates’ for higher earners

The new wave of letters comes amid IRS plans to reverse “historically low audit rates” of large corporations, complex partnerships and higher earners.
The audit rate for taxpayers earning $1 million or more was 0.7% in 2019, compared to 7.2% in 2011, according to the IRS.
While it’s unclear exactly how much the IRS will collect via the revamped non-filer program, the agency estimates there could be “hundreds of millions of dollars” in unpaid taxes from these cases.
“This is a very material amount of money that is being left on the table,” Werfel said Thursday.

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Problems with the new Free Application for Federal Student Aid have resulted in fewer students applying for college financial aid.
Given the current status of FAFSA submissions, the Department of Education is on track to see two million fewer FAFSAs submitted this year, a 15% decline, according to higher education expert Mark Kantrowitz.
Studies show students are more likely to enroll in college when they have the financial resources to help them pay for it.

Despite a growing need, fewer students are applying for college financial aid.
Problems with the new Free Application for Federal Student Aid have discouraged many students and their families from completing an application. As of the last tally, less than five million students have submitted the 2024-25 FAFSA form so far.  

That’s a fraction of the 17 million students who use the FAFSA form in ordinary years, according to the U.S. Department of Education.
“We are putting all hands on deck and using every lever we have to make sure we can achieve the transformational potential of the Better FAFSA to make higher education possible for many more of our nation’s students,” U.S. Secretary of Education Miguel Cardona said in a recent statement. 
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Yet, as of mid-February, only 24% of the high school class of 2024 had completed the FAFSA, according to the National College Attainment Network, down roughly 42% from a year ago.
“If they don’t catch up, there will be more than two million fewer FAFSAs submitted this year, down to less than 15 million total, a 15% decrease — that’s a huge drop,” said higher education expert Mark Kantrowitz.

“It would be a shocking decrease.”

The FAFSA serves as the gateway to all federal aid money, including loans, work study and grants, the latter of which are the most desirable kinds of assistance because they typically do not need to be repaid.
Under the new aid formula, an additional 2.1 million students should be eligible for the maximum Pell Grant, according to the Department of Education. However, given the slower pace of FAFSA applications being submitted, “the number of Pell Grant recipients will be about the same as last year, despite the new Pell Grant formula making it easier for students to qualify,” Kantrowitz said.
“The goal of FAFSA simplification was to increase the number of lower-income students applying. If we have fewer because of a bad rollout, it’s extremely problematic,” he added.

The new FAFSA was meant to improve college access

In ordinary years, high school graduates miss out on billions in federal grants because they don’t fill out the FAFSA. 
In New York alone, students left $226 million in Pell grants on the table in 2023. “The biggest obstacle for people going to college is the cost. And the way to get the cost down is to get scholarships and grants,” New York State Assemblymember Jonathan Jacobson said at a recent press briefing in support of a Universal FAFSA policy. “Unfortunately, you have to complete the FAFSA to get this financial aid, and that’s very difficult to do.”
Jacobson is sponsoring a bill requiring high school seniors to complete the FAFSA. “Education can be the great equalizer, but only if it’s accessible and affordable,” he said.
Universal FAFSA policies have been gaining steam nationwide, with at least 15 states considering a policy to make it mandatory for all high school seniors to fill out a FAFSA either through legislation or regulation, according to the National College Attainment Network.
Research shows those policies can have a direct link to improved education outcomes. In Louisiana, for example, which was the first state to implement this rule in the 2017-18 academic year, high school graduation rates rose and the number of high school graduates immediately enrolling in college climbed to an all-time high, according to early data.

FAFSA completion can predict college attendance

Submitting a FAFSA is one of the best predictors of whether a high school senior will go on to college, the National College Attainment Network found. Seniors who complete the FAFSA are 84% more likely to immediately enroll in college. 
However, many families mistakenly assume they won’t qualify for financial aid and don’t even bother to apply. Others said a lengthy and overly complicated application was a major hurdle.
The plan to simplify the FAFSA was meant to streamline the process.
Still, this year’s rollout was rushed, Kantrowitz said.
“They should have allowed an additional year for implementation of the new simplified FAFSA,” he said. “They did not allow enough time to get it done and not enough time for testing.”
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