FAFSA Changes: A Brief Background And Action Plan For Parents

Everything you need to know if your student is currently a high school junior or senior applying to college.

FAFSA Changes

* * * For the most recent and up-to-date information about the FAFSA, please read our most updated finaid post! ***


In the past, college applicants have bemoaned the process of applying for financial aid.

The way it used to work—and still does, at least for this year—is that students and parents submit the Free Application for Federal Student Aid (FAFSA) between January 1st and July 30th in order to receive financial aid beginning in the fall term, the start of freshman year.

The problem is that a lot of applicants have been forced to decide where they’re going to school before they learn how much aid they’ll be receiving. So hypothetically, if you’ve been accepted in-state by a public university and also a highly-ranked private university, you might have to make a decision on where to enroll prior to figuring out exactly how much each one will cost. Major problemo.

Enter Secretary of Education Arne Duncan, a knight in shimmering fiscal armor, with two major announcements concerning changes to the system:

  1. The earliest date to file the FAFSA will get rolled back from January 1st to October 1st.
  2. Aid awards will be based on family’s income from previous fiscal year, rather than the most recent full fiscal year.

We’re going to break this all down so you can figure out if the changes apply to you and what they mean. First, we’ll talk about the way the system currently works, which will be useful to students who are applying for financial aid this year. Then we’ll discuss exactly what the new changes mean and how they’ll benefit applicants. Finally, we’ll give you two sample action plans:

  1. An action plan for high school seniors and their parents.
  2. An action plan for juniors and everyone younger, along with their parents.

Cool? Let’s dig in…


As it stands, the FAFSA utilizes your family’s income and earnings from the most recently completed fiscal year in order to determine your student’s eligibility for government financial aid. This aid comes in the form of need-based Pell Grants, Federal Work-Study, and/or loans—Stafford or Perkins, which carry slightly different terms and interest rates. Stafford loans are more common, with Perkins loans reserved for those students with substantial need.

Students applying to college during the 2015-16 school year for entrance in the Fall of 2016 will submit financial information from the 2015 calendar year. This information is also officially compiled in your family’s tax return, which is due April 15th, 2015. (Of course you can already see the major issue here! Most college and financial aid decisions are sent on or before April 1st, which is two weeks before the tax return is even due. This is one of the problems addressed by the recent changes—more on that later!)

During this application season only, the FAFSA will go live on their website on January 1st, 2016. Filling it out is fairly simple, and it shouldn’t take you and your student more than two hours. Aside from basic information like address and social security number, the FAFSA asks for financial figures: household income, amount of money in bank accounts, net worth, and other factors that affect earnings. All of these will be estimates, with the official stats locked in when the tax return is filed.

Finally, your student will have to say what colleges he/she is applying to, since you’ll hear about financial aid awards directly through them, not FAFSA. The financial aid package that arrives from each college contains information on government aid and also aid directly from the school.

The official due date for the FAFSA is June 30th, 2016, but most colleges will require you to submit it by March 1st so that they can factor it into their overall aid assessment. Many schools have their own financial aid documents your student will need to fill out in addition, and some schools utilize outside forms, too. The College Board’s CSS profile, usually due along with the main college application, is like The Common App of financial aid forms. The Institutional Documentation Service (IDOC) is also maintained by The College Board and helps gather important financial documents on behalf of participating schools. The IDOC Packet is normally due around the same time as the FAFSA, as requested by each school.

After you’ve submitted the FAFSA, you will soon receive your Student Aid Report (SAR). This is a summary of the information you entered into the FAFSA and contains an important calculation known as the Expected Family Contribution (EFC). After crunching the numbers, the FAFSA determines about how much money your family should expect to contribute annually to your student’s education. The difference between your EFC and the cost of attending a certain college is how much your student receives in aid, in a mixture of grants, loans, and/or work-study. In other words:

(Cost of College) – EFC = Your Financial Aid Award


The first change to the FAFSA is the date that it goes live, which is getting rolled back three whole months. Starting next application season, the FAFSA will be available on October 1st, 2016. By having applicants complete and submit the form much earlier, FAFSA will be able to send Student Aid Reports to schools in a timely fashion, which will help avoid the potentially awful situation where a student has to decide on a college before fully learning about his/her aid.

“But hey, Admissionado!” you shout. “Who cares if my child can submit the FAFSA three months earlier? My family’s official tax return isn’t due until April 15th, 2017!”

Well, my friend, that’s covered by part two of the FAFSA change.

Starting next application season, the tax info required on the FAFSA will come from the previous year’s return. In other words, if your student is applying to college in the 2016-17 academic year, the FAFSA will utilize your family’s tax return from 2015. You’ll have filed this by April 15th, 2016, so the whole thing will have been processed months before the FAFSA goes live.

Let’s give an example to illustrate. You’re son or daughter is a high school senior, and it’s October 1st, 2016. You’re incredibly excited that the new FAFSA has just gone live. After you run around your neighborhood like a latter day Paul Revere, bellowing, “The FAFSA is coming! The FAFSA is coming!” you hunker down in front of the computer with your child to fill it out. When it asks for your family’s detailed financial information, you won’t have to estimate anything! You’ll have the data from your 2015 tax return. Simple as that.

Ready to get even more excited? You won’t even have to manually transfer the stats! You’ll be able to use the IRS Data Retrieval Tool, which will automatically migrate the tax return info into your FAFSA. Pretty cool if you ask us.

Under the current system, if you’re applying to college during the 2015-16 academic year, then your aid will be based on your family’s tax return from 2015. If you’re applying during 2016-17 under the new system, your aid will also be based on the 2015 tax return. For 2017-18 → 2016 return. For 2018-19 → 2017 return. And so on!

A quick summary of the two changes:

  1. FAFSA goes live earlier = your student receives financial aid packages sooner.
  2. Money stats come from previous fiscal year = no guesstimation while filling out FAFSA + mucho time saved with IRS Data Retrieval Tool.


Now that you know the deal, it’s time to get organized. The next steps will be different if your student is a junior or a senior, so listen up!

For Current High School Seniors
Here’s an action plan—meaning stuff you and your student should do—if he/she is currently a high school senior applying to college:

  • Now through December 31st – Familiarize yourself with the FAFSA website and platform. You and your student should definitely complete this handy four-page worksheet, which helps you understand what to expect when you’re working on the actual FAFSA.
  • January 1st – This is the first day the online platform will go live. Immediately create an account on FAFSA.gov and fill out the information with your student. You won’t be able to provide exact figures for certain areas (i.e. family income for 2015-16 fiscal year) because you won’t know this stuff for sure until you file your tax returns in April.
  • January 1st through March 1st – Make sure your student submits his/her FAFSA as soon as it’s completed and reviewed by you. The earlier it’s submitted, the better the chances are for receiving certain types of grants, especially ones from state governments. The official closing date for the FAFSA is June 30th, but most students will need to complete the form by March 1st for schools that send their admissions decisions in late-March or early-April.
  • April 15th (or earlier) – Whenever you finish your tax return, they need to replace your financial estimates in the FAFSA with the actual figures. One thing that makes it easier is the handy IRS Data Retrieval Tool, which will be an even bigger timesaver next year.
  • Anytime from April 1st onward – You won’t hear directly from FAFSA about how much money your student will be receiving in financial aid. Instead, you’ll get individual reports from colleges and universities that have accepted your student. Their aid breakdowns will explain how much money they will receive from the school (in grants, scholarships, and/or loans) and how much they will receive from federal and state governments (in grants, loans, and/or work-study). Most top-tier schools will send their financial aid reports along with acceptance letters around April 1st, since they understand this will factor into your student’s ultimate decision of where to go. However, schools with rolling admissions and/or later deadlines might not send an aid report until the summer.
  • After the decision – Once your student decides where he/she will be attending, you’ll interface mostly with that school’s financial aid office as far as aid is concerned. You’ll need to update the FAFSA annually, and you can do this beginning on October 1st of freshman year. Aid for sophomore year will likely be the same as freshman year, at least from the FAFSA, since you’ll be asked you submit the same financial information again for the 2017-18 academic year.

For Current High School Juniors
Here’s an action plan for high school juniors, which will be applicable to all younger students in the coming years (just add one to the calendar year for every grade level between your student and 11th grade):

  • April 15th, 2016 – You’ll file your tax return for the 2015 fiscal year. This report of income, earnings, and assets will be used to calculate your student’s potential aid award for next year, meaning the 2017-18 academic year when he/she will be a freshman.
  • Now through September 30th, 2016 – It’s never too early to familiarize yourself with the FAFSA! Believe it or not, the Department of Education already has a sample paper version of next year’s FAFSA, and the sole purpose of this is to allow applicants to understand the document as soon as humanly possible.
  • October 1st, 2016 – This is the official date when the new FAFSA goes live. There’s no more need to estimate important numbers like family income, since all of this will be fully reported and assessed via the 2015 tax return. And remember that you can use the IRS Data Retrieval Tool to automatically fill out most of your FAFSA.
  • October 1st, 2016 (or later) – Make sure your child submits the FAFSA as close to October 1st as possible. This increases their chances at state government grants, often rewarded on a first-come first-served basis.
  • Early 2017 and onward – Here’s the best part: students can expect to receive financial aid reports and estimates from ALL schools along with their admissions letters. This means that as soon as you know your student has been accepted to a school, you will also know how much money they’re eligible for in aid, both from the school and from the government. Of course other factors will weigh into the decision of where to attend, but you should be relieved that unknown financial aid information will not be an issue.
  • After the decision – Your student will interface directly with their selected school regarding aid. Each year, you will update your family’s financial information with the school and also online with the FAFSA. Don’t worry – updating the FAFSA is a whole lot easier than filling it out for the first time!

Whew! That’s a lot of information to digest.

With the cost of college rising each year, it’s important to understand the financial aid system, as complex as it may be. But thanks to the fantastic government folks behind the FAFSA, the process is going to get easier—and not a moment too soon.

If you have any questions or concerns about financial aid or admissions in general, please email us at info@admissionado.com! We’re always happy to hear from you.

Need some help with a college application? That’s what we’re here for!

  • B R O N D

    You wrote:

    (Cost of College) – EFC = Your Financial Aid Award

    but the right hand side of this should really be the student’s financial NEED, shouldn’t it? The award is up to the college or university. True, it will not exceed the need; but not all of them meet 100% of demonstrated financial need.

    • stephen@admissionado.com

      While it’s true that the right hand side of the equation could also be called “Your Financial Need,” it is in most scenarios what the student will receive in some combination of aid — but not necessarily from the school, you’re correct about that. Perhaps what’s confusing is my use of the word “award,” by which I don’t just mean grants and scholarships. A major part of most students’ financial aid award are loans, both government and those given by the school, and the combination of these two can often fund considerable gaps between cost of college and EFC, with the obvious stipulation that they must be repaid with interest. If this gap is not funded by grants/scholarships AND government/school loans, then the student and parents will have to seek alternate sources of funding such as private loans from banks, which carry higher interest rates. Here’s an example of a typical private loan:


      It’s available ONLY “after you have exhausted your federal loan options.” It carries some heavy stipulations, too. You need a cosigner (probably your parents), your monthly payment must be made consistently for FOUR YEARS (the length of college) in order for the cosigner to be released (you’ll still be repaying that loan after that so you need a job at that point), and finally and worst of all, the interest rates are high. Like loan-shark high. You could have an interest rate as high as 13% or even higher. By comparison, the federal student loan rate is 4.29%, and that interest can be subsidized by the government if you qualify.

      Hope this is helpful!

  • sam

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