Up to now, parents interested in financial aid have had to fill out the federal FAFSA form in January of the student’s senior year using income data for the immediate prior calendar year, even though in most cases the parents had not completed their tax returns. However, for seniors who will enter college in 2017, their eligibility for need-based aid will be based on their family’s income from 2015 (the prior-prior year), rather than from the immediate prior year (2016). The new FAFSA will become available October 1. Since tax returns for 2015 will have been filed already, families can simply have the IRS data retrieval tool move their income data electronically from their tax return to the FAFSA.
So, what about colleges that also require the CSS Profile aid application? Earlier this year, the College Board announced that the CSS Profile will also follow the prior-prior method.
One obvious benefit of the new process is that families will not have to estimate their income data in January and then update the FAFSA after filing their tax returns.
Another interesting aspect of the new process is that colleges will get the FAFSA results in October, at about the same time that even the early college applications will be submitted. So, college financial aid offices will be able the provide financial aid offers to the student at the same time as they send admission letters. Often, in the past, colleges sent admission letters in November or December for Early Decision or Early Action applications, but did not provide financial information until several months later, leaving the student in doubt as to whether they could afford the college.
This week’s Chronicle of Higher Education reports that about two-thirds of colleges are planing some changes to their process; one may be earlier priority deadlines for financial aid consideration.
The process of applying to college will follow much the same calendar as before. According to the rules of the National Association of College Admissions Counselors, colleges may not set application deadlines prior to Oct. 15, nor can they require students to make an enrollment decision prior to May 1 of their senior year (with the exception of Early Decision). NACAC member colleges are expected to adhere to these dates. So the new process results in much more time between the receipt of aid letters and the May 1 deadline for deciding.
But, what if a family has a significant reduction in income for 2016? In that case, the family should contact the college’s financial aid office and request “professional judgement” be applied by the aid office.
And finally, many families do not submit a FAFSA because they do not believe they will qualify for aid. This may be a mistake. Here is why most if not all families should submit a FAFSA:
- With many colleges costing over $60,000 per year, families with incomes over $200,000 may qualify for some aid.
- A FAFSA is required to take out the low-interest and possibly forgivable federal student loans.
- If a family’s situation should change after the student applies, due to loss of a job or death of a parent, the college can immediately award aid, if a FAFSA is on file.
- Ironically, a FAFSA that shows a high income can in some cases help the student be admitted if the college is looking for more students who will be paying the full cost of attendance.
If you have questions about college financial aid or about any other aspect of planning and applying for college, please get in touch with me.