President Barack Obama made a crucial announcement on September 14 concerning Free Application for Federal Student Aid (FAFSA).
Beginning with the 2017-18 school year, prior-prior year (PPY) tax information will be used for FAFSA giving families an earlier and more accurate idea of their anticipated financial aid and college costs.
With the switch to PPY, students and families will be able to:
- Families can file FAFSA earlier in October 2016 for the 2017-2018 instead of waiting for January 1, 2017
- FAFSA will be available for more students and families. 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. PPY could cost Education Department approximately $400 million a year since more eligible students likely will apply for aid
- Families will 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. Notifying students earlier of their financial aid packages will also leave more time for one-on-one counseling with students and families
For higher education institutions, PPY should make it easier for colleges and universities to verify data. According to the White House, colleges and universities have spent as many as 3 million total hours each year verifying FAFSA information, including income and other tax return data.
PPY will impact many of our tried and true processes: packaging and sending financial aid awards; setting tuition; aligning scholarships with new FAFSA timing; getting more time to talk with students and families about their options; and more. Jenzabar is already assessing our processes and moving FAFSA update release dates to October. Which is also when schools can import ISIRs now. What processes have you been talking about on campus? Let us know!
For more information concerning PPY, NASFAA has created two explanatory videos to help understand this important policy change:
- A quick and simple video your office can share to help students and families better understand how PPY will benefit them; and
- A more in-depth video explaining why this move to PPY will not only allow students to have earlier information in order to make enrollment decisions, but will also give financial aid administrators some relief from mounting administrative burden and ensure they have more time to spend counseling students