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National FAFSA changes shifts financial aid process

<ir="ltr" id="docs-internal-guid-a1ac7776-5453-0482-d814-55aa7ffea1b7">The FAFSA (Free Application for Federal Student Aid) has undergone several large-scale changes in the last year. Most significantly, the FAFSA now requires tax information from the prior-prior year, or PPY as it is called in the financial aid industry.

To give an example of this change, to receive financial aid for the 2017-2018 school year, students will submit their 2015 tax information and not their 2016 tax information, as they did previously.

After a push from the Obama administration last year, the Department of Education explored the possibility of including the completed taxes from two years prior, according to Michael Kotchevar, Associate Director of Student Financial Services and Admissions.

The Department of Education discovered that in 90 percent of cases, the financial aid award would not significantly change when using the taxes from an earlier year. This study led to a nationwide shifts in the FAFSA application. “The financial aid community drove this change,” said Kotchevar.

Kotchevar stated that the process for the other 10 percent of cases, where family’s circumstances change dramatically over two years, is an unknown for this school year. He did say, however, that the Financial Aid office already has procedures to help families in changing financial situations and that these policies will be used in these cases.

The PPY system allows for students to submit their FAFSA much sooner, which “simplifies the process for everyone,” said Kotchevar. Students can access the FAFSA October 1st, three months before the previous start date of January 1st.

For the 2017-2018 school year, students do not need to estimate their tax information in the winter, only to update their finances closer to national tax day in the spring. Now, students can use the data retrieval tool on the FAFSA and pull their previously completed tax information directly from the IRS, stated Kotchevar.

Current students have a choice of three deadlines in order to receive their 2017-2018 award. The first round is due on January 1st, 2017, and these students will be notified of their award mid-February. The second round falls on the first day of spring term on March 27, 2017. The notifications from the second round will be released around mid-May. The last round will be due on June 1st, 2017 with awards sent out in mid-July, according to Carleton’s financial aid website.

These three separate rounds allow for the spread of workload over a longer period of time, alleviating some of the stress during processing periods for the financial aid office, according to Kotchevar.

Some students already completed their financial aid information for next year, and each will be notified of their award during winter term, according to Kotchevar. “Why have them wait six months for a decision?” said Kotchevar.

For students applying to Carleton, the process will not change significantly, according to  Associate Dean of Admissions Jaime Anthony ’06. The ability to use PPY tax information allows incoming students to complete their financial profile and receive their aid package information earlier. Now, the regular decision financial aid application is due Janurary 1st, 2017, along with the regular decision applications.

Yet, admissions anticipates more impact on current students already familiar with the financial aid process. “Prospective students don’t know any differently,” said Anthony.

This year will act as a trial run for these national changes in admissions and financial aid. According to Anthony, the industry is already raising critical questions about the May 1st decision deadline when students can discover their financial aid award much earlier. No decision on this deadline has been made.

Unlike some other schools around the nation, Carleton will not offer financial aid packages to families before the student is accepted at the college, according to Associate Dean of Admissions Adam Webster.

The offices at Carleton are also engaging in discussions about how to support under-resourced students in filling out their financial information and the best strategies in communicating the changes to prospective students, as there is a potential for families to get lost in the process, according to Anthony.

Despite the ongoing discussions and questions about the new decisions, both offices are optimistic about the changes and anticipate an easier process for incoming and current students alike. “It’s a win for students and families,” said Kotchevar. 

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