There are important changes you need to be aware of with regard to the FAFSA because it AFFECTS EVERYONE APPLYING TO COLLEGE AND TO THOSE ALREADY ENROLLED!
Today we have a special guest post by Jessica Peabody from All*Star Financial Aid to help us understand what is going on and what we need to do.
Big Change: When to Apply for College and Financial Aid
The landscape of college admissions and financial aid is changing. In the financial aid world the change is called prior-prior year. Before this change, the college admission calendar year for a high school senior would run from summer prior to senior year until Christmas. Then, beginning in January with the release of the newest FAFSA, the pressure is on to complete the financial aid process. This is where the college financial aid calendar year picks up for high school seniors.
But now thanks to the prior-prior year changes, the two calendars become aligned. So parents and students no longer have to wait until January to file the FAFSA. Starting October 2016, the 2017-2018 FAFSA will be available to file.
A Deeper Look
The FAFSA stands for Free Application for Federal Student Aid. Anyone seeking to attend college is highly encouraged to complete the FAFSA. This application gives students and parents access to the largest amount of financial aid available. Federal programs like the Pell Grant and Direct Loans are awarded based on the information provided on the FAFSA. State Agencies as well as Colleges and Universities use the FAFSA to determine what types and amounts of aid students are eligible to receive.
For a basic overview of what the FAFSA is you can read FAFSA, The Most Boring Topic Ever, And Why You Should Read It.
Before, the FAFSA was released in January. Students and parents would use prior year tax information to complete the FAFSA. So for example, a senior that plans to graduate from high school in 2016 and plans to attend college in 2016-2017 would need to complete the 2016-2017 FAFSA using 2015 taxes.
Now the FAFSA will be available to file in October 2016. In order to file the 2017-2018 FAFSA in October students and parents will use prior-prior year tax information which would be their 2015 taxes.
Benefits of this Change
Filing the FAFSA earlier will give students and parents more time to decide which college to attend and how to pay for college. Usually the fall of a high school senior’s year is filled with college campus visits and applying to colleges. Now high school seniors will be receiving award letters in the fall and will have time to process what financial aid they are receiving and from where. This also allows more time to apply for outside scholarships as well as make the spring semester of the senior year more enjoyable.
Completing the FAFSA in October will eliminate guess work. Usually in January parents and students have yet to file their taxes. Most of the time W-2s and other tax forms are used to guess the parents and students income from the previous year. This often leads to errors and can raise red flags, potentially resulting in Verification (a long arduous process similar to an audit, meaning you have to submit detailed tax and income information to each school to verify what was entered on the FAFSA is accurate).
Now the guess work is eliminated. More people will be able to use the IRS Data Retrieval Tool because their prior-prior year taxes will have been filed.
Calling all High School Juniors…
The time is now. The timeline has been pushed back. The fall of a high school junior’s year should consist of making a list of colleges and universities in which they are interested. The list should be narrowed during the spring due to attending campus visits. Then the summer before the senior year of high school should consist of applying to colleges and universities.
By the time October roles around high school seniors and parents should have an admissions decision from each of the colleges and universities on the list. It is not too late, so start now!
Get started by checking out All*Star Financial Aid. They can help you through the admission and financial aid process.
Those Currently Enrolled in College
It is just as important for those currently enrolled in college to file the FAFSA starting this October. Yes, those currently enrolled in college will need to complete the FAFSA every year they plan to be enrolled in school. Most call this a FAFSA renewal.
The reason to file in October rather than wait until January is because some aid is awarded on a first come, first served basis. Some schools may look at the date in which the FAFSA was submitted to determine who gets priority for certain financial aid funds.
Students should file the FAFSA every year they plan to be enrolled in school. The reason is income changes every year as well as household size could change from year to year.
Most of the time institutional aid (scholarships) stay the same throughout the college students career but as far as need based aid (federal grants and sub loan) it will fluctuate based on the student and parent’s income.
Now the 2016-2017 and 2017-2018 FAFSA information should yield the same results. However it gives families more time to figure out how they want to finance the following year.
To receive aid other than scholarships the FAFSA must be filed every year. For this year, that means filing it twice; once now for 2016-2017 and again in October for 2017-2018.
Mark your calendars for October!
If you would like more incredible information to guide you through the financial aid aspect of finding the right college for the right price, please join our FREE Financial Aid Webinar on March 28, 2016.
I have several more articles for you about finances and scholarships at http://therecruitingcode.com/financial/
I hope to see you all on Monday night for the webinar!