Prior-Prior-Year Financial Aid
Senior year, the college admissions process is filled with emotions: a rollercoaster of stress, celebration, despair, highs, and lows. Part of this stress stems from the mismatched order of the whole thing. Let’s use this hypothetical example:
Amanda is a great student: top 30% in her class, challenging herself with a couple APs, and volunteers with a veterans service group on a monthly basis. She has applied to four colleges: TCU (her top choice), Texas State, Trinity University, and UNT. By mid-December, she will have received her acceptances – she got into all except Trinity. Great! She takes a second tour of each to help herself settle on which college is the best fit for her.
January 1, the day the FAFSA opens, Amanda and her family apply for financial aid, knowing the offers will be a big part of the process of deciding where she attends. She won’t get her financial aid offers back until March, but in the meantime, after doing school visits and hours of thinking, she gets her heart set on TCU, deciding the other two colleges aren’t as good a fit.
But then March comes. Her parents open the financial aid offer from TCU, where Amanda is so excited about going, to find out it’s going to be significantly more expensive than Texas State, where she will not only have in-state tuition but also received a generous merit-based scholarship. They are in the awful position of explaining to Amanda that TCU is not feasible because of financial fit.
That same awful pattern has repeated itself time and time again each admissions cycle for far too many years. But there’s good news here: big changes have just been made, through Executive Order by President Obama, which will (hopefully) allow families to receive financial aid offers closer to the time they receive acceptances, allowing them to use that critical piece of information in the process of deciding where to attend.
How is that going to happen? By using financial information from what’s called the Prior-Prior-Year. Juniors: this affects you (seniors, sorry, you are stuck with the old system). Juniors and their families will now be able to submit the FAFSA in OCTOBER, instead of waiting until January.
There are other changes happening with the FAFSA. Here’s a quick overview:
- Fewer questions. Previously, the deluge of questions, often seemingly unnecessary, overwhelmed students. The most overwhelming of the sections being the financial section. The hope is that by making it easier and quicker to complete, more students will apply.
- IRS Data Retrieval Tool. This great new tool is embedded into the financial section of the FAFSA. It allows students to pull information directly from their parents completed taxes instead of manually trying to flip through the 1040 to figure it out. This not only makes it so much easier for students to complete their FAFSA, it saves financial aid offices from doing the “double check” with the IRS to ensure accuracy.
- FAFSA opens earlier (October). With the previous January application opening, people would file their taxes and then immediately complete their FAFSA in a dash to meet the March financial aid deadlines that most colleges have. Some 4 million students complete the financial section of the FAFSA with “estimates” of their parent’s earnings because their parents haven’t completed their taxes (also forcing them to complete FAFSA without using the IRS data retrieval tool). If students apply earlier, colleges could potentially provide financial packages earlier. This not only aids students in the college selection process, but it allows families to financially plan earlier or seek counseling from financial aid administrators.
- Uses “prior prior” year tax information. With the changes to the FAFSA open date, students will now being using the “prior prior” year’s tax data instead of just the prior years information. Good news is that it will allow many more people to be able to use that IRS data retrieval tool. This means ease and accuracy for all! For example… a student who completes their 2017-18 FAFSA in October of 2016 will be using the 2015 tax year data.
This is an important, but slightly dizzying change happening quickly. I encourage you to read more about it from people far more articulate. Here are couple good places to do that:
Questions? Send me an email: firstname.lastname@example.org