College applications deadlines are fast approaching. Your child has the dream college where he wants to apply. At this point, you’re just hoping you can afford any college.
The Free Application for Federal Aid, or FAFSA, is a tool which helps students and their parents afford college. Based on the application, student financial aid eligibility is determined. This means you get to know how much money—if any—you’ll have to contribute to your child’s tuition.
Until now there’s been some problems with the FAFSA. One problem is the application contains three times more questions than a typical federal income tax form. The second problem is the deadline to begin completing the application forced people to complete college applications before they even knew what their expected contribution would be. In September 2015, an updated FAFSA was introduced that will affect students applying to college in 2016.
The New FAFSA
It’s vital to fill out the application as soon as possible. Pell Grants are distributed on a first-come first-serve basis so the sooner you submit your information the better.
Students heading to college in 2017 will be able to submit the FAFSA as early as October 1, 2016. Families will be allowed to use tax and financial data from two years ago instead of last year. This is referred to as prior-prior-year data.
Note: For students attending college in the fall of 2016, the earliest you can submit the FAFSA is January 1, 2016.
No Need for Gathering IRS Documents
Another key change is the IRS Data Retrieval Tool. The Tool automatically inputs tax information from the prior year. This means you can avoid a major step in the FAFSA application process. No more handing over your tax documents to your child and hoping he doesn’t lose them.
Families will also be able to bypass the financial aid office’s verification requirements. Sometimes a student’s financial aid information is flagged for verification. The student will have to send the financial aid office copies of tax forms to verify the actual amount parents and/ or student earned. The Retrieval Tool deletes this possible step because the information comes from the IRS.
With the two biggest problems solved, you’ll now know more about your family contribution regarding financial aid. Your child can start dream about getting accepted to his favorite college and you won’t have to worry about being able to afford it.
For more on information on the FAFSA and financial aid, download our free eBook, How to Avoid Wasting Money on College Tuition: Facts and Fiction About Financial Aid.
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