New Rules for Submitting the FAFSA Start on October 1
Eileen St. Pierre, The Everyday Financial Planner
Boy, at lot has changed since I applied for college over 30 years ago. I’ve yet to meet a client that looks forward to filling out the FAFSA, Free Application for Federal Student Aid, either for their kids or themselves. It may not cost anything to fill it out, but it can sure cost you in time, let alone the cost of repaying student loans. The federal government has announced new rules regarding the FAFSA process for the 2017-2018 school year and beyond.
You can now submit the FAFSA three months earlier.
You can start applying on October 1, instead of waiting until January 1. Here’s the catch – you will use the information on your 2015 tax return. No more estimating income. You can submit the application while the student is still completing college applications. If the student decides to apply to other colleges after submitting, you can edit the FAFSA and have your information sent to that college later on.
Use the IRS Data Retrieval Tool to reduce the risk of verification.
If you qualify, you can use this tool to automatically import your 2015 tax information so you do not have to re-enter it. Let’s hope the tool works properly. The government has some practice at doing this. Those of us who purchase our health insurance in The Marketplace have our tax return data merged with our insurance applications.
If you have amended your 2015 return, you cannot use the tool. If you expect your 2016 income to be substantially different from your 2015 income, you will need to do the following:
- Fill out the FAFSA using your 2015 information.
- Have the student apply and be accepted at the school of his/her choice.
- Contact the school, give them your updated information, and ask them for a professional judgment review.
You may hear about financial aid awards a lot earlier.
This allows families to make more informed decisions about how to pay for college by giving them more time to think about their options. But there is no guarantee you will hear earlier – especially in the first year of this new process. In addition, your child still needs to apply and be accepted at a college before a financial aid package can be put together.
This Fact Sheet has more information on the new process.
Just because you qualify for financial aid, does not mean you have to accept it.
Please seek financial counseling if you’re not sure. The fee you may have to pay will be a lot lower than the interest on a student loan you may not need.