Big change to Federal Aid Application

President Barack Obama took executive action on Sunday, September 13 to allow the use of prior-prior year (PPY) tax information on the Free Application for Federal Student Aid (FAFSA). Using two-years prior tax information on the FAFSA (as opposed to one-year prior information) will increase the form’s accuracy and give families an earlier and more accurate idea of their anticipated financial aid and college costs.

Beginning with the FAFSA for the 2017-18 academic year students will be able to submit their FAFSA applications as early as October 1, 2016, rather than January 1, 2017 – a move that will allow them to see their federal aid offers sooner, and ideally make better-informed decisions when applying to college.
With the switch to PPY, students and families will be able to:

• File the FAFSA earlier. The FAFSA is made available January 1 of each calendar year, yet it is uncommon for a family or individual to be prepared to file an income tax return in the month of January. Under the new PPY system, the 2017-18 FAFSA will be available in October 2016, rather than January 1, 2017, and students can use the PPY’s completed income tax return.
• More easily submit a FAFSA. The IRS Data Retrieval Tool (DRT), which allows automatic population of a student’s FAFSA with tax return data and decreases the need for additional documentation, can be used by millions more students and families under PPY, since tax data from two-years prior would be readily available upon application.
• Receive earlier notification of financial aid packages. If students apply for aid earlier, colleges can in turn provide financial aid notifications to students earlier, ensuring that students and families have more time to prepare for college costs. Early notification also means more time for financial aid administrators to counsel students and families. 

In the near future we will start our institutional conversations about what this means for us. More updates will be provided as we know more.