This is typically the time of year high school seniors are taking the SAT or ACT (or probably retaking them), working on early admission applications, and trying to pare down their list of places to apply by yearend. For parents, the primary tasks used to be overseeing that process and deadlines, along with paying application fees. The hard parental stuff – financial aid applications – used to be the next phase, after the applications were in. Now, however, the college financial aid timetable, particularly for the FAFSA (the Free Application for Federal Student Aid), has undergone changes with parents encouraged to get started in October rather than next Spring, long before many high school students have written their application essays, if they even started them.
The FAFSA is the government form every college student in the U.S. must fill out to be eligible for any government need-based financial aid or work-study programs. The CSS Financial Aid PROFILE from the College Board is the much longer form that is used by many private schools for nonfederal and other financial aid programs.
The two types of U.S. aid forms (both of which are required by many schools) used to require the parents’ and/or students’ financial information in the from the prior tax year to determine aid for the following year. In other words, the 2015 information determined aid for the 2016/2017 school year. This has changed with the new timetable. Many schools now require everything to be submitted by yearend, presumably tied to the application deadline.
Both the FAFSA and PROFILE can be submitted as early as today, Oct. 1, using 2015 federal ta returns and financial information. – documents or data parents and students probably have not looked at since March or April. This means that financial aid for the 2017/2018 school year will be based on the same data as the 2016/2017 year for returning students. This new Department of Education policy refers to this as the “prior-prior year” information. Proponents of the change claim it will make the whole process easier.
Those who pushed for the change argued that the old timeline requiring the information to be completed in the first quarter of a year based on the previous year’s data left families rushing to file their taxes to get the FAFSA and PROFILE completed in time. They will no longer be waiting for dividend statements, @2s or 1099s before finalizing the process; those were already submitted long ago for the “prior-prior year.” Additionally, colleges have also encouraged people to complete their financial aid applications early, because many aid programs distribute funds on a first come, first served basis.
However, a problem with the new timetable is when people have changing income levels. Financial aid decisions will be based on out of date bank and brokerage account balances, not to mention previous income levels. Undoubtedly, more parents will be filing appeals with schools that offer aid packages. That is because the aid amount will be based on their older financial data that does not reflect their current economic reality because of either job changes (i.e., losses) or a drastic drop in the value of assets.
Whether good or bad, the fact is that with the changes in the college financial aid timetable, people should get started on the FAFSA and PROFILE now. That will remove one stressful hurdle in the long-stretch run of the college application and decision process.
Written and Edited by Dyanne Weiss
CNN: FAFSA changes: What you need to know to get the most financial aid
Forbes: The October 1st FAFSA Filing Date Is Not A Deadline, Despite Erroneous Reports
SallieMae: Reminder: The Free Application for Federal Student Aid (FAFSA) Will Be Available on Saturday, Oct. 1
CollegeBoard: CSS Financial Aid PROFILE
Photo courtesy of TaxCredits.net