Applying to schools is hard. They make you jump through hoops and fill out all kinds of forms, and if you need financial aid, it only gets more complicated. But there’s good news: this year, the Federal Student Aid office (the FSA in FAFSA) is putting some new changes into effect that might make it easier for you to get financial aid.
Here’s what you need to know.
Older tax data will now be accepted
Beginning with the FAFSA for those attending classes during the 2017-18 school year, you are now able to submit a FAFSA earlier, using earlier tax data.
Previously, the FAFSA filing system required that students and parents complete the federal form as soon after Jan. 1 as possible with a cutoff date toward the end of February. This caused some problems for families because typically the previous year’s taxes aren’t filed until April. As a result, families have had to estimate their income tax based on previous years and then update their information later as changes are discovered.
A new policy unveiled by the Obama administration last September aims to take some of the guesswork out of this process. The 2017-2018 FAFSA has been available to file since Oct. 1, 2016 — not Jan. 1 of 2017 as it would have under previous policy — and requires tax and income information from 2015, which has already been filed in spring of 2016. This permanent change enables students to complete and submit a FAFSA as early as Oct. 1 every year with accurate, non-estimated information.
This earlier start date has not affected federal deadlines, but some school deadlines may be affected. Several states’ deadlines have been changed from “as soon as possible after Jan. 1” to “as soon as possible after Oct. 1.” Specific states’ filing deadlines are printed on the FAFSA document, and deadlines specific to schools can be found on their respective websites.
Asset protection will decrease significantly
Just like in past years, parents of dependent students are required to report their financial information on the FAFSA, including income and the value of major assets, their home or car if they own them, etc. A portion of these assets up to a certain value is not counted toward the amount that the parents are expected to contribute to their child’s education. That can mean that the student would qualify for a higher amount of federal financial aid than they would otherwise get. In the coming school year, that protected amount is going to decrease dramatically, continuing a downward trend established in previous years.
How much parents’ assets are exempt varies according to the filer’s personal information. Factors including the marital status and age of the student’s parents and the number of other dependent siblings play a role. For the married parents of a dependent student, where the student is an only child, and the oldest parent is 48, $30,300 of their assets would be protected in 2015-2016 academic year. This following year (2017-2018) will see that amount reduced to to $18,700, just more than half.
This decrease looks like bad news for middle-income families who depend on need-based financial aid for their college students. However, those in the lowest income brackets should be spared. Most of the families in the lowest income bracket don’t have enough value in assets for this change to make much difference for them, and income is weighted more heavily than assets in the final calculations anyway.
Most schools will no longer be able to see your other choices
When you file a FAFSA, you are allowed to put down up to 10 schools to send the document to for aid consideration. In past years, those colleges could see every other school on your list and what order you put them in. Starting now, they won’t be able to view this information.
This change is good news for applicants. According to experts, some schools have used the order of the list as an unofficial order of preference and have used it to decide how much aid to offer a prospective student. An institution might have interpreted a student’s decision to list their school first on the FAFSA as a sign that the student would be more eager to attend despite a smaller financial aid package. Schools could then use this as a reason to offer a lower amount of aid to a student who may have otherwise qualified for more.
The crucial detail to remember about this change is that it only applies to private institutions. State schools can still see where they are ranked, so it’s important to remember to list any state schools first to be awarded the best aid package possible.
Change is always hard, especially when it involves systems that have been in place for years. However, these changes to our student aid system will help people apply for financial aid more easily and more accurately than in previous years.
Have something to add to this story? Comment below or join the discussion on Facebook.
Header image: Adobe Stock