Anyone who’s gone to college is familiar with the yearly process of filing a FAFSA to determine their eligibility for federal student aid, and the many frustrations that accompany it. For instance, it’s important to file as soon as possible after January 1st since funds are often awarded on a first come, first served basis, even though you might still be waiting on tax information from the previous year. Many people end up submitting estimated amounts rather than waiting, updating the application once they’ve completed their taxes. Either way, it’s a pain.
But wait, it get’s better…
According to a recent announcement by the Obama administration, the tricky timing of FAFSA filing will get a little easier in the 2017-2018 school year. Instead of having to wait until January, applicants will be able to file starting in October of the previous year. So, beginning October 2016, students will able to file for the 2017-2018 school year. How is this possible without completed tax information? Eligibility will be based on tax information from the previous year (in the case of this example, 2015). This effectively eliminates the need for revisions.
Of course, since the tax information being used to determine eligibility is 2 years old instead of 1, you (or your parents) may need to file a loss of income report if you’ve experienced significant changes in income within that time frame. All this being said, here are a few more tips for filing the FAFSA report and maximize your award-package potential.
1. File Early.
These changes don’t take effect until the end of next year, so unfortunately you’ll still need to file that FAFSA as close to January 1st, 2016, as possible. Even when the process opens in October 2016, it’s still a good idea to file as early as you can to ensure you’ll receive the aid you need.
2. Don’t Think You’re Eligible? File Anyway.
About 1.7 million students failed to apply for federal student aid last year. Why? They probably didn’t think they qualified for a payout. The rules and formulas used to calculate eligibility are highly complex, so file anyway even if it looks like you don’t qualify. It really can’t hurt.
3. Fill in ALL fields
They’re not bluffing about this requirement… it really does matter. Instead of leaving portions blank, always fill fields that don’t apply to you with a zero.
4. If You Have Assets, Find Out How to Handle Them.
A certain percentage of a student’s and their parent’s assets (although much smaller) are considered usable for tuition expenses. How you have your assets allocated can make a tremendous difference in your eligibility for student aid. For instance, a 529 account opened by the parent for their child’s educational expenses is considered a parental asset (which means a smaller percentage of it will be considered usable for tuition). Additionally, capital gains may count against you, while retirement accounts won’t. For the most accurate and updated information, talk with your accountant or other FAFSA expert.
5. Don’t Be Afraid to File an Appeal.
Don’t underestimate the power of a persuasive appeal letter. Documenting a job loss, with supporting third-party documentation, can be an effective way to appeal a disappointing aid package. Be sure your information is detailed and accurate.
There are, of course, more technical tips to fine-tune your chances of receiving the best possible aid package, but these basics will get you started. So file early next year, and look forward to the new streamlined process for 2017.