Upcoming FAFSA Changes

Each year students must submit a Free Application for Federal Student Aid (FAFSA) to determine eligibility for federal student aid. Federal student aid includes Federal Pell Grants, Federal student loans, and work-study opportunities. Currently, this application uses prior year (PY) income data to calculate a student’s financial need. Because of this, it is important that students fill out the FAFSA as early as possible once the application is released to be considered for all types of financial aid.

Unfortunately, a delay in completing the income tax return can cause an unfavorable chain reaction, even if the delay is unavoidable. The income tax return delay can result in a delay in submitting the FAFSA, which can result in a delay in financial aid notification- and possibly a reduced amount of financial aid. This occurs because some forms of financial aid have limited funds, which is distributed on a first come, first-served basis.

In order to minimize this time crunch and FAFSA completion pressure, two major changes to the FAFSA will take effect for the 2017-18 school year (July 1, 2017 through June 30, 2018). The first is that the FAFSA will use prior-prior year (PPY) income data to calculate a student’s financial need. Since prior-prior year income data is to be used, this allows for the second major change; the FAFSA to be available earlier. The FAFSA would be available starting October 1 of the previous year instead of January 1 of the upcoming school year.

PPY chart

Although this may sound confusing below you will find answers to some questions you may have regarding these two changes.