Student Aid Application Changes

New FAFSA Made Easier

Student Aid Application Changes
October 22, 2015

The Free Application for Federal Student Aid (FAFSA) is the fundamental gateway form for almost every type of financial aid, including government programs. Grants, loans, and work-study programs from the Federal Government provide $150 billion per year to college students across the nation. Yet there was a 2.8% decrease in FAFSA filings from the 2013-2014 academic year to the 2014-2015 academic year. Why would such a critical form decrease in usage, especially during these times of skyrocketing student costs?

Part of the reason is misunderstanding of eligibility requirements. During the past academic year, an estimated 1.7 million students failed to apply for financial aid thinking that they were ineligible. FAFSA guidelines are available here to clear up any confusion about eligibility requirements.

The complexity and timing of the FAFSA form is another major reason that the form goes unused. FAFSA goes into incredible detail about finances, alienating people on both ends of the economic scale. If you are relatively wealthy, FAFSA can be as formidable as your tax forms — in fact, it requires a fair amount of tax information — and you will not be able to get similar FAFSA preparation help. For less financially savvy households, the eight-page FAFSA can be so intimidating that families either give up or fill out the form incorrectly.

Students are urged to fill out the FAFSA as early as possible, because some schools and states allocate FAFSA money on a first-come, first-served basis. FAFSA forms can be filed starting January 1st, but since FAFSA requires updated tax information to calculate your expected family contribution (EFC), parents are put in a difficult position. Most parents do not receive the necessary information to file taxes before February at best, and those waiting to file until April 15th risk being left out of FAFSA money.

Many parents choose to file FAFSA early using estimated data and then amend the filing in April with accurate tax data. Having to deal with a complicated form once is bad enough, and few parents appreciate a second trip down FAFSA lane per year for each child in college. In some cases, parents forget about updating the FAFSA information, causing even greater headaches.

The Obama administration recently announced plans to simplify the FAFSA filing process, if not the form itself. Beginning in the academic year 2017-2018, parents will be able to file FAFSA forms starting in October of the year prior, using the tax information from a year before that.

For the last year of the standard FAFSA process, the academic year July 2016 to June 2017, the starting date for FAFSA filing is January 1, 2016 and the tax information is from 2015 (the information on the tax form that you file in 2016). By contrast, for the academic year July 2017 to June 2018, the starting date for FAFSA filing is October 1, 2016 and the tax information will still be from 2015 (the "prior-prior year"). That pattern continues in future years.

This change means that revisions are no longer necessary, since the tax information for the FAFSA will be based on completed tax forms and does not require estimates. However, this does mean that your financial aid calculations will be based on two-year old tax information. Parents who have suffered a job loss or other income loss should file a loss-of-income form to explain the situation.

It would be nice if the FAFSA form were simplified as well as the process. However, embattled parents of college students will take every bit of relief that they can get.

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Erin | 10.22.15 @ 16:01
Simplifying the process sounds like a great start. You wouldn't think it should be such a big struggle to simplify the forms as well.
Sarah | 10.22.15 @ 16:02
This is cool. It needed a bit of an overhaul.
STOKES | 10.22.15 @ 16:02
It's nice that they're simplifying it. It's a pretty complicated affair.
Angie | 10.22.15 @ 16:02
I've had to do the FAFSA LOTS of times! For myself and 4 of my children so far. It has certainly been simplified from the way it was in years past, although it's still no walk in the park!
Amanda | 10.22.15 @ 16:03
Good information, thank you, I'm sure in the 6 years until my son goes to college a bunch will change, but hopefully moving in the right direction
Steffanie | 10.22.15 @ 16:03
Great information and thankful to hear they are simplifying it as I have a senior in high school.
Nancy | 10.22.15 @ 16:06
I'll take any help they can give. Hopefully, the form simplification isn't too far behind.
Carla | 10.22.15 @ 16:07
I am glad this is changing for the good. There are so many that don't apply because the process has been so complicated, they give up.
trish | 10.22.15 @ 16:07
Great information for when I am ready for this process
Bobbie | 10.22.15 @ 16:09
I hope it really is easier since I had to go through the process not to long ago with my older daughter, and younger daughter is within the next 12 months.
Elaine | 10.22.15 @ 16:13
It needed simplifying. It was such a hassle.
Jonathan | 10.22.15 @ 16:16
It's about time, but like all thing government, change is usually slow.
Meredith L | 10.22.15 @ 16:17
This is very good information considering that I am considering returning back to school within the next year or two. Thank you!
Debbie | 10.23.15 @ 04:28
I did all this paperwork for my oldest at the beginning of the year and it was not bad at all
$commenter.renderDisplayableName() | 11.25.20 @ 02:34