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Earlier FAFSA popular, but problematic, too

Posted on Tuesday, September 13, 2016 at 8:00 am

Advocates for students say a set of changes to the federal financial aid process for which they’ve long advocated will help many thousands of families who need federal aid to pay for college.

But those changes — automatically populating the Free Application for Federal Student Aid with family income data already filed for tax purposes and releasing the application months earlier — are causing uncertainty for both colleges and the advising professionals who work with students. Those concerns have focused most prominently on whether colleges will move up their financial aid deadlines in order to get award notifications to students sooner, a Department of Education priority.

In years past, high school seniors applying for federal student aid would have to estimate their family’s income information for the previous year. That can be a challenge even when applying close to the March deadline because many families don’t have their taxes completed until tax day in mid-April.

For low-income students, especially, that made the process more onerous and frequently led to burdensome verification checks of family incomes. The Education Department believes the use of the latest tax information filed with the Internal Revenue Service by a student’s family, combined with a new Oct. 1 release date of the FAFSA, will make the application process easier for low- and middle-income students who need federal aid to pay for college.

Higher education groups see the FAFSA changes this application cycle as a starting point for further simplification of the financial aid process down the road.

09-11-16 fafsa pic_2The prior-prior year income data, as the two-year-old tax information is known, was a policy idea that got kicked around for years before the department’s Federal Student Aid office was able to include an automated data retrieval tool in the online FAFSA.

The idea had bipartisan interest and was talked about for possible inclusion in the next reauthorization of the Higher Education Act. Late last year, however, the department announced it would adopt the change without any congressional action. Along with that change, the department moved up the release of the FAFSA two months from Dec. 1.

Under Secretary of Education Ted Mitchell has urged colleges and universities to provide notification of financial aid awards to students earlier in the admissions process, so that they can make better-informed decisions about where they can afford to enroll. In response, a handful of institutions have moved up their deadlines for priority financial aid to as early as November. Some colleges have said that in order to get students news of financial awards sooner, they need to receive FAFSA forms from students earlier as well.

College access advocates have said those earlier deadlines could end up hurting lower-income students by compressing the financial aid timeline for high school seniors already neck-deep in admissions applications.

“We fully support the early FAFSA program,” said Carrie Warick, director of partnerships and policy for the National College Access Network, which advocates for low-income students. “What we are watching closely is how colleges react to these changes. In particular our goal for early FAFSA was to give students more time to go through the process, and if those deadlines are moved particularly into November, we fear that it really truncates the entire admissions process.”

NCAN had sought further clarification from the Department of Education on financial aid deadlines, joining a number of members of Congress who raised concerns to groups representing colleges and universities.

Mitchell released a letter last month asking institutions not to move any priority financial aid deadlines up from those used in previous years.

Justin Draeger, President and CEO of the National Association of Student Financial Aid Administrators, said colleges are experiencing a “bit of whiplash” from the communications urging them to make financial aid decisions earlier but not to move up application deadlines.

“From a school standpoint, I think you look at both of those things and you’re sort of left with conflicting guidance,” Draeger said. “From our perspective, it’s about making students aware and letting schools implement what works best for their populations.”

At Motlow College, the Financial Aid processing deadline is set for Nov. 30, 2016 for those students attending the Spring 2017 semester.

Policy experts are calling this a transition year for the financial aid process. Regulators, elected officials and colleges themselves will be paying attention to how the new timelines work out. It’s possible that institutions that maintained traditional deadlines this fall could opt to move them forward in subsequent years. Hawkins said observers will also be watching for potential undesired effects, like a drop in diversity on campus or a declining number of students from low-income backgrounds.

Starting with the 2017-18 application cycle, the following changes will be put in place:

—Students will be able to submit a FAFSA earlier. Students will be able to file a 2017–18 FAFSA as early as Oct. 1, 2016, rather than beginning on Jan. 1, 2017. The earlier submission date will be a permanent change, enabling students to complete and submit a FAFSA as early as October 1 every year. (There is no change to the 2016-17 schedule. The FAFSA became available January 1 as in previous years.)

—Students will use earlier income information. Beginning with the 2017-18 FAFSA, students will be required to report income information from an earlier tax year. For example, on the 2017–18 FAFSA, students (and parents, as appropriate) will report their 2015 income information, rather than their 2016 income information.

Policy experts are calling this a transition year for the financial aid process. Regulators, elected officials and colleges themselves will be paying attention to how the new timelines work out. It’s possible that institutions that maintained traditional deadlines this fall could opt to move them forward in subsequent years. Hawkins said observers will also be watching for potential undesired effects, like a drop in diversity on campus or a declining number of students from low-income backgrounds.

 —By ANDREW KREIGHBAUM, InsideHigherEducation.com