September 14, 2015, President Obama announced two major changes to the Free Application for Federal Student Aid (FAFSA) process.
First, the President announced a change to the date when students and families can begin to submit a FAFSA. For example, the 2016-2017 FAFSA will be available on January 1, 2016. Beginning with the 2017-2018 financial aid application cycle, the FAFSA will be available on October 1st of the year prior to the upcoming award year. Thus, 2017-2018 FAFSA filing will begin on October 1, 2016, a full three month earlier. By having the FAFSA available earlier the financial aid process will generally coincide with the traditional college admissions application and decision cycle, hopefully allowing schools and states to provide financial aid information sooner to students and families.
Second, the President announced a change to which tax year’s information will be collected on the FAFSA. Beginning with the 2017-2018, FAFSA income information from one tax year earlier – dubbed “prior-prior year” will be collected. This means that the 2017-2018 FAFSA will collect tax year 2015 income information and not 2016 information. As a result of this change most students will be able to complete their FAFSAs using information from an already completed tax return. This in turn, will provide most of them with the ability to electronically transfer their income tax return information from the IRS into the FAFSA using the IRS Data Retrieval Tool (DRT). This is in contrast with the current “prior year” process where many applicants submit their FAFSAs before tax returns have been completed resulting in the need to estimate income and tax information that subsequently needs to be corrected once the tax return is filed; or worse, waiting to complete their FAFSA until after the tax return has been filed.
Over the next few weeks Federal Student Aid will be providing more information regarding the use of professional judgment, verification and other issues, relating to the transition to “prior-prior year” data beginning in 2017-2018 for school administrators.
As you could imagine, this change in the application cycle will impact the FA office and will likely require schools to modify their existing procedures by October 2016.
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