While the FAFSA process currently opens on January 1 and closes June 30 for the school year beginning the following fall, the process will now open on October 1 of the year preceding the school year. So, beginning October 1, 2016, students and families can complete the application for the 2017-2018 school year. The FAFSA process will continue to close on June 30.
The second major change is that students can use income information from an earlier tax year to complete the FAFSA. Beginning with the FAFSA process opening this fall, students and their families can use 2015 income information instead of 2016 income. This will avoid a common practice of students completing the FAFSA with estimated income in an effort to meet state financial aid deadlines, which often fall in March.
Below is a chart provided by the Department of Education designed to help illustrate the changes.
You should be aware that the Department of Education made another change, one that is probably not as welcome: the “asset protection allowance” (APA) is now lower. The APA allows families to save without having that amount count against them in the determination of how much financial aid the student can receive. The lower the APA, the more income the family is deemed to have to spend on tuition and other expenses, and the less financial aid the student will likely receive. The APA for the 2016 – 2017 school year is published in the Federal Register.
Campus visits, college applications and anticipating a new season of life can be exciting and a little tense, but applying for financial aid has been downright stressful for some. With these new changes to the FAFSA process, students and their families should see some deadline-related relief as they determine how to fund higher education expenses.