There are a few changes happening to the Free Application for Federal Student Aid, commonly referred to as the FAFSA. These changes will take effect over the course of 2016. Here we will briefly overview the FAFSA changes so that parents and students will know how changes may effect them going forward.
- Previous year’s tax data will now be accepted – Starting in October 2016, students will be able to file their FAFSA before the new year, using the tax data from that year, instead of estimating new tax data after January. This means colleges will be able to send out financial aid packages earlier. Furthermore, students and their parents will be less likely to make mistakes while estimating their tax information.
- Asset protection cut in half – Previously, the guardian’s savings and investment funds were not counted against a student’s financial aid awards, as long as assets were less than $30,300. Now, that number has been cut in half, setting the bar for protected assets at $18,700. As a result, students may receive less financial aid if assets exceed that amount.
- Schools can no longer see the other schools that a student has listed – Schools will now objectively issue financial aid packages, without knowing which other schools a student may be considering. In the past, schools could see how a student listed prospective colleges on the FAFSA, the first school usually being the most preferred, but now schools will not see such information. As a result, the college/university cannot use it as an advantage to decipher the likelihood of a student attending their school. However, state agencies can still see such information, so FAFSA filers may want to list a state college first to increase the chances of the student receiving state aid.
Source: U.S. News