BUSTING NEWS: FAFSA Based on Prior-Prior 12 months Income
Good news coming out of Washington for future college students and their families: the educational funding application process just got a lot easier! On Sunday, Sept 13 th , Chief executive Obama signed an executive order mandating the collection of what is referred to as prior-prior year income data on the FAFSA.
As numerous parents know, the FAFSA type becomes available for the coming school 12 months on January 1 saint . In order to meet financial aid application deadlines , families must complete the FAFSA in January or February of the child’s senior year in senior high school, long before their tax returns are comprehensive for the prior year, and should guesstimate that year’s tax data as best they can. Calculating these estimates is a burdensome process for college students and parents, and often results in inaccurate financial aid awards that must be adjusted as soon as taxes are finalized in 04.
The new executive order simplifies the educational funding process. Beginning with the 2017-18 school year, the FAFSA type will become available in October instead of January, allowing colleges to provide financial aid provides earlier in the college application schedule. The application will ask for the family’s prior-prior year tax data, through tax returns that were finalized months previously. No more guessing. No more confusion. No more uncertainty. Students graduating in 2017, who does previously have had to wait until January 2017 to apply for aid based upon quotes of the 2016 tax information, can now apply for financial aid as early as October 2016, providing only their 2015 tax information. Numbers will be final, easy to find, and accurate.
The benefits of the new process are numerous:
- Assuming colleges format their timelines with the earlier accessibility to the FAFSA, families will get earlier financial aid offers, allowing them to make informed enrollment decisions and strategy appropriately for future costs.
- The process will be less complicated. Parents won’t have to suppose anymore—they will report numbers they will already know.
- In fact , since prior-prior year tax returns will already be complete, parents will be able to simply click a button on the FAFSA to import their income figures from the IRS database—they don’t even have to answer the questions by themselves!
- Financial aid offers will be accurate. Since offers will be based upon final tax figures brought in from the IRS, there will be no need to proper numbers and adjust financial aid awards right after enrollment decisions have been made.
The only drawback to the use of prior-prior year income data is that colleges will now be basing educational funding awards on information that is, essentially, out-of-date. When a family is applying for financial aid, they will be providing revenue data that is almost a year older, and by the time the student in fact enrolls in college, almost one more year has passed. The family’s income can change dramatically more than this kind of timeframe, so applicants must be diligent about keeping the colleges informed of any changes in circumstance, such as a parent’s job reduction. If your prior-prior year revenue is higher than your current or anticipated future income, you must take the initiative to ask the financial aid offices to think about your special circumstances. If you don’t, it will take an extra year before that drop in income is accounted for in the financial aid award.
Therefore , while extra effort must today made by families who experience a large drop in income from their prior-prior year, the new executive order simplifies the financial aid process dramatically for your vast majority of applicants. The guesswork has been removed from the application, plus, moving forward, completion of the FAFSA must be straightforward, award offers should be accurate, and the whole financial aid process must be, if not stress-free, at least less nerve-racking for students and their parents.
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