Debt Job Personal Finance

How would the new rules for FAFSA form affect you?

how fafsa rules affect you

Good news for all the parents and high school students. The Free Application for Federal Student Aid, also known as FAFSA form will be available 3 months early this year. This means you can apply for financial aid from October 1, 2016.

This new change will have a big impact on the high school students and their families. Here’s how.

1.You can easily give all the financial information: You can use the figures from your 2015 income tax return when applying for 2017-18 financial aid. This means you use your ‘prior-prior’ tax information instead of estimating your income, which you have probably done in the previous years.

As per The Department of Education, 2 million Pell-eligible students couldn’t apply for the financial aid last January 1 due to the complex timing with tax filing.

2. You can avoid getting selected for verification: The IRS Data Retrieval Tool makes the filing process simple and easy. You can directly import the numbers into your FAFSA form and thus avoid getting subjected to verification. In the previous years, one-third of applications were subjected to verification. Hopefully, this figure will drop significantly with this tool.

3. Your child can file for FAFSA when applying for colleges: The three months early availability of FAFSA will be beneficial for mostly low-income students since it prolongs the filing period for most colleges and gives counselors more time to guide students.

4. You may come to know about financial aid awards sooner: One of the reasons to change the timeline is to help colleges inform accepted students about financial aid awards promptly and give them more time for making the final decision. It is tough for the students to decide on a college by May 1 after receiving award letters in April. This year, the situation will be different.

A few colleges will send award letters quickly while others may stick to the same timeline. If students don’t have no clue about when they can possibly get financial aid package, then they should contact the school.

And, finally,

Have your financial situation changed lately? Are you worried that your 2015 income tax return doesn’t reflect your present financial scenario? If so, then just submit the FAFSA and visit your child’s college once he’s been accepted. Give your recent financial update and request for a professional judgment review.