pay the way FASFA starts in october !
Show Me the Money :
Changes for the Senior Class of 2017 and Beyond
The class of 2017 will find that the FAFSA ( Free Application for Federal Student Aid ) process will be different than for previous graduates . How do the changes affect your chance for aid ? Let ’ s break it down :
Get Your Aid Information 3 Months Earlier
In previous years , students would apply to colleges in the fall and then wait until January to apply for federal aid .
Now the FAFSA application will open October 1 , putting it more in line with the college applications process . This is good news , because it means you will know your EFC ( Expected Family Contribution ) sooner , enabling you to target schools that are the best financial fit .
No Waiting for Tax Season
Under the old system , families began filing the FAFSA in January . Since taxes aren ’ t due until April , families would then estimate data based on 2016 earnings and update their information after filing ( or opt to wait until after filing to complete the FAFSA , which meant less money available !).
The new policy allows families to use the data from their 2015 tax returns , which eliminates the need to estimate and then update the FAFSA after taxes are filed . You should know how much aid to expect earlier , giving you more time to make financial decisions - and locate more scholarships and funding .
Asset Protection Will Decrease
A certain portion of a family ’ s assets ( such as investment funds ) may be sheltered , which means they are not counted toward your EFC . This sheltered amount varies and is dependent on the age of the older parent and whether the parents are married .
With the new changes , the amount that can be sheltered decreases , which will mean less aid for those families , to the tune of hundreds or even thousands of dollars per year .
School Preference Won ’ t Be Available to Colleges
In the past , students could list up to ten colleges in order of preference on their FAFSA . That information was made available to schools , who could then see where they ranked by students . Since colleges know that most students end up at their first choice school , many colleges would base aid decisions on where they landed on that student ’ s list . This sometimes meant less aid offered to prospective students who did not list that school as a top choice .
This year , however , that information will not be available to schools . This is good news for students — hopefully all your school choices will maximize their financial aid packages during the application process !
Think you don ’ t need to file a FAFSA ?
Think again ! There is no income cutoff to apply , and it won ’ t just affect federal aid ; your college may offer other financial awards only if you have a completed FAFSA on file .
According to nerdwallet . com , students missed out on $ 2.7 billion in aid in 2014 , mostly due to not filling out their FAFSA !
If you have two children in college , your EFC ( what you are expected to contribute ) is split between the two students , allowing for much more aid than with only one student attending .
Looking
AHEAD :
With the new changes to the process , families will now use tax information from 2 years prior when they fill out their FAFSA . This means that if you have a younger student , it is a good idea to start thinking about how income and assets are counted now in order to get the best EFC ( Expected Family Contribution ) on your FAFSA later !
18 | Fall 2016 www . potentialmagazine . com