Change is in the Wind for the FAFSA
Change is “in the wind” with regard to the Free Application for Federal Student Aid (FAFSA). In particular, three factors, two of which are clearly designed to help students in the college going process, are being rolled out by the Federal government in 2016.
1) Whereas students who start college in 2016-2017 will need to use their family’s IRS tax return from the prior year (2015) in completing the FAFSA, those planning to start college in 2017-2018 will be able to complete the FAFSA using their family’s IRS tax returns from the second year prior; i.e.,2015. With a reliance on the “prior prior” year, colleges using the FAFSA as the primary determinant in the calculation of financial need will be able to make earlier assessments of the “Expected Family Contribution” (EFC).
This is great news for students applying to state universities and less selective private colleges that use the FAFSA exclusively. For them, the process has just become simpler and more transparent.
For students applying to any of the 300+ private colleges that use the College Scholarship Service (CSS) Profile to calculate financial need, however, the “prior prior” implications with regard to the FAFSA will likely create more confusion for two reasons. One, the Profile will only utilize prior year data and, two, employing a practice known as “differential needs analysis,” institutions with access to a student’s financial “need” as calculated by both methodologies will reserve the right to define need and expected family contribution according to the methodology that best suits their strategic enrollment interests.
This is noteworthy because the respective assessments of need can vary by as much as $10,000 making the determination of need highly subjective on the part of the institution. Imagine the confusion that results when a family, anticipating an EFC based on the FAFSA receives a financial aid award that presumes a much higher EFC derived from the Profile. As a result, consumers need to be wary of institutional claims of “meeting the full and demonstrated need” of all admitted students.
2) The second significant change to the FAFSA eliminates the requirement that students list the colleges that are to receive reports of their “Expected Family Contribution” in order of importance to them. In the near future, the listing requirement will be gone altogether from the FAFSA—and that’s a good thing! While admission officers have always been able to cast sidelong glances at the listings of their competitors—and make inferences about the student’s likelihood of enrollment—the digital age has made access to such information as easy as a keystroke. No good can ever come to the student from the sharing of this information anywhere—on the FAFSA, the application for admission or in interviews with admission officers!
3) Finally, the Feds are reducing the asset protection allowance on the FAFSA that will have a nominal effect on low and middle income families. Rather, families on the cusp of financial aid eligibility might find that they are no longer considered for federal assistance. Related changes have long been factored into the CSS Profile, though, so the result of the FAFSA need analysis is more likely to parallel the outcome of the Profile for higher income families at colleges that require both forms.