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New Rules for the College Financial Aid FAFSA Form

Must reading for parents with pre-college high school kids

By Joanna Nesbit

Starting this fall, the Free Application for Federal Student Aid (FAFSA form) will be available October 1, three months earlier than in the past. This change has major implications for families planning to apply for financial aid.

Here’s a rundown if you have a high school child expecting to go to college and you’ll want to apply for financial aid:

What the Changes Mean

It’ll be easier for you to pull together the financial information needed. That’s because the new rules let you use “prior-prior” tax information. In other words, if you’ll be applying for 2017-’18 financial aid, you’ll use figures from your 2015 tax return. In the past, you needed to estimate your income. Even families who filed for a tax extension should have their tax return in hand by October 15.

Starting this year, no one will need to estimate income for the form as they’ve done in previous years, says Mark Kantrowitz, a leading expert in financial aid and publisher of, a free website to search for colleges and scholarships.

The Department of Education estimates the FAFSA’s previous January 1 availability contributed to 2 million Pell-eligible students not filling it out due to the complicated timing with tax filing.

You may be able to get your FAFSA tax information swiftly with the handy IRS Data Retrieval Tool. If you qualify to use the IRS Data Retrieval Tool, you can then import the numbers directly into your FAFSA form.

This not only simplifies the process, it means your FAFSA is much less likely to be selected for verification. In the past, about one-third of applications were subjected to verification, but Kantrowitz expects that number to dip significantly with the data retrieval tool.

Some families gave up on their FAFSA if it was subjected to the verification process, leaving state and institutional aid on the table, says Cory Notestine, a high school counselor facilitator in Colorado Springs, Colo.

If your financial situation has changed since 2015, you can ask a college for a financial review. Notestine reports that some families are concerned about using prior-prior tax information because it may not reflect their current financial situation. If your circumstances or income have changed, submit the FAFSA and then contact your child’s colleges once she’s been accepted to report your 2016 updates and ask for a professional judgment review.


You may hear about financial aid awards earlier. The new timeline is partly intended to help colleges notify accepted students about financial aid awards sooner and buy families some decision-making time. Admissions and financial aid experts have long recognized that receiving award letters in April and deciding on a college by May 1 is a tight turnaround.

However, this year will be a transition year. Some colleges may provide award letters earlier, and others may operate on the same timeline as previous years. “If students are confused about when they might receive a financial aid package from a particular institution, we encourage them to reach out to the school,” says Megan McClean Coval, vice president of policy and federal regulations for the National Association of Students Financial Aid Administrators.

You can now submit the FAFSA while your child is still completing college applications. Schools will be pushing FAFSA awareness during the back-to-school timeframe, says David Hawkins, executive director for educational content and policy at the National Association of College Admission Counseling. The early availability of the form benefits students, particularly low-income and some first-generation kids, because it lengthens the filing period for most colleges and gives counselors more time to help students apply.

You should fill out the FAFSA even if your child isn’t sure about going to college. “If these students have any inkling they’d like to go to school beyond high school, they should fill out the FAFSA,” Hawkins says. “If students decide to take a gap year or time off to work, their aid eligibility won’t be affected if they fill out the FAFSA and don’t enroll anywhere.”

Ambivalent students can list colleges of interest on their FAFSA. Then the form will be given to those colleges and the students can update the list later when they apply.

Just bear in mind that colleges can’t create a financial aid package until a student applies and is accepted. “The FAFSA submits your income data to the federal government for federal student aid and you’ll learn your estimated family contribution. But to activate that aid, as well as institutional aid from the college itself, you have to apply and be accepted,” Hawkins says.

Coval encourages undecided students to submit the FAFSA early but also to contact colleges’ financial aid offices if they have questions. “Schools want to help,” she says. “Everybody wants this change to work in the way it’s intended — that is, to benefit families.”

Colleges’ priority financial aid deadlines help them develop a picture of their applicants’ need and institutional aid they might need to award, Coval explains, and many will hold funds for late-filing students. But filing earlier is better. According to Kantrowitz, students receive more aid, on average, by filing in the first three months. That’s because states, colleges, and scholarship programs use the FAFSA to determine eligibility for state and institutional aid, including some merit awards, and these deadlines typically fall earlier than federal deadlines.

Joanna Nesbit is a freelance writer who writes about parenting, education, lifestyle, family travel and the Pacific Northwest. Her website is Read More
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