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What were the changes announced by the Obama administration in September 2015?



In September 2015, the Obama administration announced several changes to the FAFSA application process which will take effect in October 2016.

The first change has to do with the tax information required by the FAFSA. Traditionally, the FAFSA application traditionally has asked for student tax information and/or parent tax information for the year prior to the academic year. For example, the FAFSA for the 2015-2016 academic year asks for 2014 tax information, and the FAFSA for the 2016-2017 academic year asks for 2015 tax information.

However, beginning with the 2017-2018 academic year, the FAFSA will ask for tax information for the year “prior-prior” to the academic year. For example, the FAFSA for the 2017-2018 academic year will ask for 2015 tax information, and the FAFSA for the 2018-2019 academic year will ask for 2016 tax information.

Note that this creates a one-time anomaly, where 2015 tax information will be required on two subsequent FAFSA applications. In particular, 2015 tax information will be required for both the 2016-2017 and 2017-2018 academic years.

The second change has to do with the length of the FAFSA application filing window. Traditionally, the FAFSA application for a given academic year has an 18 month filing window. For example, for the 2015-2016 academic year, the FAFSA can be filed with the federal processor from January 1, 2015 to June 30, 2016.

However, beginning with the 2017-2018 academic year, the FAFSA can be filed three months earlier, extending the filing window to 21 months. For example, the FAFSA for the 2017-2018 academic year can be filed with the federal processor from October 1, 2016 to June 30, 2018, and the FAFSA for the 2018-2019 academic year can be filed with the federal processor from October 1, 2017 to June 30, 2019.

Together, these changes should mean that the common practice of estimating tax information, only to have to return and correct it after filing taxes, will largely become a thing of the past. For example, a FAFSA applicant filing on January 1, 2016 for the 2016-2017 academic year will need to provide estimates for their 2015 tax information, since they will not even get their 2015 W-2 form until the end of January 2016. However, a FAFSA applicant filing on October 1, 2016 for the 2017-2018 academic year will provide 2015 tax information, which they would have finalized several months prior (by April 15, 2016), so no tax estimates should be necessary.

In summary:
  • Beginning with the 2017-2018 academic year, the FAFSA application will ask for prior-prior year tax information, instead of prior year tax information.
  • Also beginning with the 2017-2018 academic year, the window of opportunity for filing the FAFSA application with the federal processor will be extended from 18 to 21 months.

Finally, the Obama administration announced the College Scorecard, which is a new government collection of data on over 7000 colleges to help students and parents objectively compare colleges. Student Aid Application Services LLC will work on integrating and displaying this data to better serve you, including common sense numbers for each college like average annual cost, graduation rate, and average salary earned by graduates.


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