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When to Apply for College Financial Aid

May 01, 2018 2 min read

 

With a dizzying array of options, terms, forms and guidelines, parents might feel like they need to sign up for a few classes themselves as they try to figure out how they’re going to pay for a child’s college education.

Federal financial aid can be a big part of the equation and is our focus here, because now is the time to understand it – with a key date in early October and major changes in place for this year’s aid application process.

These changes affect all college students looking for financial aid, including federal loans, for the 2018-2019 school year. The good news: Not only will the process be a little easier, decisions about aid and, therefore, your out-of-pocket costs will be based more on concrete finances instead of estimates.

 

What has changed

  • Earlier deadline. Beginning with the 2017-2018 academic year, the timelines for applying for financial aid under the Federal Methodology – which is used by the federal government, all public colleges, and many private colleges to determine aid packages – have been moved earlier. Families can file the Free Application for Federal Student Aid (FAFSA) form as early as October 1, 2017, to qualify for federal loans and other types of student aid.
     
  • No more income estimates. Since the timeline has been moved up, the FAFSA will now be based on your financial information from an earlier year. For the 2018-2019 academic year, filing will be based on a family’s 2016 income and tax information. (This is known as prior-prior year income.) In the past, families typically had to wait until the end of the calendar year to file a FAFSA, and, since federal taxes likely had yet to be filed, year-end financial information was often estimated.
     
  • Easier filing. With the FAFSA information now filed based on income information from an earlier year, you can easily import that income information from the IRS to the FAFSA filing system through an application called the IRS Data Retrieval Tool. This will simplify completing the FAFSA form.
     
  • The same criteria. Many private colleges also require the College Scholarship Service (CSS) Profile form as part of the Institutional Methodology for awarding financial aid. More than 200 private colleges use the Institutional Methodology to determine whether students are eligible for non-governmental financial aid they issue directly, including grants, loans, and scholarships. Although the CSS Profile could be filled out as early as October 1 in the past, it will now be based on prior-prior year income as well. As a result, the required income and tax information for both the FAFSA and CSS Profile will be based on the same year.

 

Eight facts on FAFSA

  1. FAFSA stands for Free Application for Federal Student Aid. More than 22 million families submit it every year.
  2. FAFSA is the key that unlocks more than $122 billion in aid a year.
  3. Getting almost any form of financial aid — including federal, state, and college-sponsored grants, educational loans, and work-study programs — begins with completing the FAFSA. Families seeking financial aid must submit it every year the student attends school.
  4. Beginning with the 2018-2019 academic year, the FAFSA will be based on the prior-prior year’s income. For example, for a freshman enrolling for the 2018-2019 academic year, the FAFSA will be based on the family’s 2016 income.
  5. Most financial aid is awarded on a first-come, first-served basis, so submit your FAFSA as soon as possible after October 1. Most families can use the IRS Data Retrieval Tool to transmit IRS tax return information directly into their FAFSA.
  6. The Department of Education recommends allotting 1-2 hours to fill out the application, and there’s a toll-free help hotline: 1-800-433-3243.
  7. While waiting for results of their FAFSA filing, students can get an early estimate of how much federal aid they may qualify for by completing the FAFSA4Caster at the U.S. Department of Education’s Office of Federal Student Aid.
  8. A FAFSA can be submitted electronically or by mail.

Click here for more info on FAFSA from the Department of Education.

 

Bottom Line

We all know from our own student days how waiting until the night before was no way to study for an exam. Don’t wait until the last minute to get on top of the FAFSA filing process. Get ahead of it, and all your college funding options, now – so when October 1 comes, you’re ready to get the federal aid your student needs.

 

For Compliance Use Only:1015190-00001-00

 

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