NEW YORK (MainStreet) — Next year, high school students will get a head start on submitting their FAFSA applications, the Free Application for Federal Student Aid, as the Department of Education (ED) will let students apply for aid based on their family’s income found in tax returns filed two years earlier instead of the previous year. President Obama took the wraps of the plan at a town hall meeting in Des Moines, Iowa on Monday.
The deal enables students to submit their FAFSAs as early as October of their senior year. Currently students must wait until January. The new, bigger window will give applicants more time to submit FAFSAs. They will no longer have to wait for current tax returns to be filed.
The change will take effect for students seeking federal financial aid for the 2017-18 school year. Those students will be able to submit a FAFSA using their 2015 income, rather than having to wait until their families' 2016 taxes are done.
Tax returns two years removed from the year of a FAFSA filing are known as "prior-prior year" returns. The prior-prior year process has long been championed by many higher ed experts, yet it has been about 20 years in the making.
Mark Kantrowitz, senior vice president and publisher of Edvisors.com, who first proposed the use of prior-prior year returns in 1996, recalls that there was a lot of opposition from the Advisory Committee on Student Financial Assistance (ACSFA), an ED-sponsored group, and the National Association of Student Aid Administrators, a trade organization of about 20,000 financial aid professionals at some 3,000 colleges and universities. ACSFA is an advisory body and the advent of the FAFSA did not amount to an administrative burden for them.
"There is always a lot of resistance to change,” said Kantrowitz, even to solutions whose benefits are obvious. "A key concern at the time was whether this would affect the accuracy of the FAFSA data and lead to more appeals for adjustments. The opposition evaporated over time as people ran data analyses and became more comfortable with the idea.”
"Also, Congress passed legislative changes to allow the IRS to share data with the U.S. Department of Education and to enable the use of prior-prior year," Kantrowitz added. "This lead to the IRS Data Retrieval Tool starting in 2009-10 and opened the possibility of using the IRS Data Retrieval Tool with PPY data to pre-fill questions on the FAFSA, thereby simplifying the form. But change is always slow, especially when it requires government action.”
He notes that there was no resistance at all to retiring the paper FAFSA forms."When the percentage of FAFSAs filed online increased to 99% of all FAFSAs, the Department stopped mailing out printed forms but still made them available upon request," he said.
Senator Lamar Alexander (R-Tenn.), chair of the Senate Health, Education, Labor and Pension (HELP) Committee, has announced his support for prior-prior year. “A bi-partisan group of senators have been urging this for two years,” he said in a statement, “and intend to include it in the reauthorization of the Higher Education Act this year.”