The Free Application for Federal Student Aid (FAFSA) provides millions of students with needed student loan help. Unfortunately, the program can oftentimes be confusing, leading nearly 2 million students to miss out on a loan they likely would have received.
The FAFSA doesn’t just provide for direct loans, it also includes grants, work-study programs, and other types of help from the Federal Government. Every year $150 billion is paid out to college students across the nation.
From 2014-2015 there was a 2.8% decrease in FAFSA filings compared to the previous year.
The reason for the decline? Some experts believe it is the complexity of the forms themselves. Parents and students can spend hours attempting to navigate the tax requirements and other documentation that goes into filing a FAFSA. Compounding the issue is the fact that many parents estimate their taxes and then must file an amended form later in the year. Some parents fail to file the amendment, which causes further headaches, while others simply abandon the process for fear of filling out the complex forms a second time.
The Obama administration recently announced plans to simplify the FAFSA filing process. Beginning in the academic year 2017-2018, parents will be able to file FAFSA forms starting in October of the year prior, using the tax information from the year prior.
“For the last year of the standard FAFSA process, the academic year July 2016 to June 2017, the starting date for FAFSA filing is January 1, 2016 and the tax information is from 2015 (the information on the tax form that you file in 2016). By contrast, for the academic year July 2017 to June 2018, the starting date for FAFSA filing is October 1, 2016 and the tax information will still be from 2015 (the “prior-prior year”). That pattern continues in future years.”
Because financial aid calculations will be based on two-year old tax information, parents who have lost their jobs will be able to file a loss-of-income form to explain the situation.
Unfortunately the actual 8-page process is remaining in place for the time being.