Changes are coming to the FAFSA!
The Base Year is moving on up – from the current “one year prior” to the student entering college, to “two years prior.”
Current high school Seniors (Class of 2016) don’t need to worry, though.
All of the talk in Congress has been drowned out! The White House announced today, that current high school Juniors will be able to use the family’s 2015 tax data to file their FAFSA form for the start of college in the Fall of 2017.
That’s right, students in the Class of 2017, will now be required to file for financial aid, using really old tax data!
Well, it might not appear to be that old, but the fact of the matter is the financial aid eligibiligy for a student entering college in the Fall of 2017, will be based on income the family made in 2015… two years prior.
The Good – theoretically, families will not have to log into the FAFSA form multiple times (like they have to now) in the Spring of Senior year of high school, to obtain an accurate read on their financial aid eligibility.
They will only have to file once, and that should allow for a speedy review and establishment of their financial aid award letter.
The Bad – For families where income fluctuates dramatically from year to year (i.e. a salesperson, or small business owner), this requirement to show income from two tax years pior to entering college, could create a terrible situation for a student. If a family’s income dropped 20% from 2015 to 2016, they would still be expected to pay for college in 2017 based on their 2015 income. Not a good outcome.
The Ugly – Situations will arise that don’t even exist. A few examples could include the fact that colleges are not very agile when it comes to updating their costs of attendance each year. Oftentimes, a student will receive an award letter in May while the college or university may not set their budget for the upcoming academic year, until July!
As with all major changes from the Federal Government and the college financial aid system, the advice is to remain vigilant. Know what your family should be expected to contribute, and establish your family’s strategy for paying for each year of college – before your student’s Sophomore year in high school.