FAFSA - do you understand the changes?
Major Changes to FAFSA 2017-18
In September 2015, U.S. President Barack Obama announced two radical changes to the Free Application for Federal Student Aid or FAFSA.
1. File earlier: Instead of waiting until January 1st, 2017; you can now file it in the October of the previous year. Applications are accepted from October 1st, 2016 onwards. This is intended to be a permanent change, and so will be applicable to all future applications from 2017-18 onwards as well.
2. Use earlier income and tax information: Starting from 2017-18, a student can report income and tax information pertaining to 2015. For 2018-19, it will be the income and tax information that relates to 2016; and so forth.
Note: The 2016-17 FAFSA, which can still be filed before June 30th, 2017, requires the income and tax information for 2015.
Question: Since both FAFSA 2016-17 and FAFSA 2017-18 require the income and tax information for 2015, can the information submitted as part of FAFSA 2016-17 be used for the 2017-18 application?
Answer: No. Because this information could have changed in the meantime. It is HIGHLY recommended that you use the IRS Data Retrieval Tool to fill in your renewal application.
Why are these changes being made?
Currently, a lot of tax forms aren’t due until April 15th, while FAFSA applications are accepted from January 1 onwards. For those applying earlier, they have to estimate income and taxes. This could turn out to be wrong later, and so the changes seek to use information that has already been filed with the IRS. You need not worry about remembering what exactly the information submitted in 2015 was when it is October 2016, the IRS Data Retrieval Tool should help you with this. We highly recommend using this tool. It will make your life a lot easier.
Normally, applications are accepted from January 1 through June 30 of the succeeding year. That is to say, if the current academic year is 2015-16, FAFSA applications would have been filed from January 1, 2015, to June 30, 2016. This is an 18-month window; and the new changes increase this to 20 months, aligning it more with the last dates for applying to college. This reduces pressure on students who are applying for early decisions. You can list the schools you are considering applying to, and your FAFSA information will be sent to them – this also makes it easier for admissions officers at colleges as well.
Remember that federal aid isn’t the only source of student aid there is. These changes are also intended to give you more time to explore alternate options, such as state aid and institutional aid, whose application deadlines typically come later.