How do the FAFSA changes impact me?

The President will unveil significant changes to the FAFSA (Free Application for Federal Student Aid) form early next week. What do these changes mean for families and students preparing for college?

First of all, before anyone with a current senior in high school gets too excited, these changes won't go info effect until next year. This means that they will NOT impact students applying for aid for the 2016-17 school year, but the 2017-18 school year. In other words, these changes impact families with children that are juniors in high school and younger.

The Federal government will allow students to apply for aid based on reported income from two years prior to application, rather than the current process of using information from the immediately previous year. Whereas the FAFSA can currently not be completed prior to January 1, the President's office plans to change the process so families can submit the form as early as October of the student's senior year of high school.

Overall, the changes to the FAFSA form provide families with the benefits of the CSS (College Scholarship Service) Profile without also carrying what many consider to be the negatives of that much more extensive form. For years schools have used the CSS Profile to provide families with financial aid award information much earlier than they are able through the FAFSA.

Think of it this way. Many students apply to schools in the fall of their senior year, perhaps even earlier for those institutions that carry rolling admissions. Before this change to the FAFSA, these same students had to wait until at least January, with most recommended deadlines falling between February and March, to complete the FAFSA.

Without the FAFSA, schools were unable to provide financial aid award figures for families. While it's obviously important to receive an admissions decision on whether you are accepted into the school or not, a family can't make a complete decision until they know what, if any, financial aid the school is going to offer.

Pushing back the date that families can begin completing the FAFSA should allow for earlier financial aid award offers. This will allow for families to make better decisions earlier, when they still have time to change their mind or look into other options.

Under the current system a family may have to wait until April to know how much financial aid they are receiving from a school. The earlier they can receive this information the more time they have to make a decision and shift course as needed, looking into other schools and weighing other options. When I was a financial aid counselor I met with several families in the late spring that essentially had to take the offer received since it was too late to do anything else.

While the CSS Profile currently  offers the ability to submit information earlier than January 1, it does so by requiring intricate estimates of a family's income and assets. This is required because the financial aid offer is based off the current year's income. For example, if you were completing the FAFSA or CSS Profile this winter, you would not be able to correctly submit this without either having detailed estimates of your 2015 income and assets or having filed your 2015 taxes.

The President's changes will avoid this step of estimating earnings by allowing families to use tax information from forms already filed. In the above example, a family would be able to more automatically complete a FAFSA using information from their 2014 taxes, as the government now offers a way for families to auto-fill their tax information by linking to the IRS.

In all, these changes will make the FAFSA easier to complete. It will also allow families to learn of financial aid award offers sooner than they were previously able to. Both of these changes should benefit families preparing for the financial aid process.