People starting college in the fall of 2017 probably haven't yet decided where they're going to school, let alone figured out how much money they'll need to do it, but it's almost time to start applying for financial aid. In the past, students and their families could turn in the Free Application for Federal Student Aid (FAFSA) starting Jan. 1 of the year they'll need the aid, but that date has been moved up.
It's coming up quickly, too. For the 2017-18 academic year, people can turn in the FAFSA as early as Oct. 1, 2016. That's in less than 3 months.
Why So Early?
Before we get into the specifics of this change, it's important to point out why you'd want to turn in the FAFSA so early. Figuring out how you're paying for college is one of those "the sooner, the better" kind of things. Though the application has "federal" in the name, states and schools also use the FAFSA to dole out financial aid, and every state and school has different ways of doing that. Some distribute aid on a first-come, first-served basis, so the longer you wait to turn in your FAFSA, the lower your chances of receiving assistance.
With that sort of pressure, you'd think college-bound people (or their parents) would greet the stroke of midnight with a toast of "Happy New Year! But first, FAFSA." It doesn't tend to happen that way, for a few reasons. First, a lot of people don't realize how important it is in getting financial aid, or they assume they won't qualify for aid, so they don't bother with the paperwork. (Insert "you won't know if you never try" cliche here.) In addition to the common mistakes of not knowing deadlines or underestimating the importance of the FAFSA, people put it off because they think they won't have all the information they need to complete it until after they've filed their taxes.
For example: The FAFSA for the 2016-17 school year required applicants to enter their income information from the 2015 tax year. The deadline for submitting your 2015 income tax return was April 18, 2016. At that point, the FAFSA deadline in many states had passed, or states had already awarded all available aid. How could an application that requires 2015 tax information come due before your 2015 taxes, you ask? You can estimate your financial information on the FAFSA, allowing you to turn in the application before you file your taxes, which is something a lot of people may not realize.
Yes, it's confusing, which brings us to the new policies coming in a few months.
What Changed?
For the 2017-18 academic year, students and their families will use their financial information from the 2015 tax year to fill out the FAFSA. The idea is that this will make it easier to fill out the form earlier. It also allows more people to take advantage of the IRS Data Retrieval tool. It transfers your tax information to the FAFSA, but because many people have traditionally filled out the FAFSA before completing their taxes, that tool hasn't been as helpful as it could be.