Image source: Getty Images.
Continue Reading Below
FAFSA: Those five little letters send chills down the spine of anyone who's navigating the college application process. Filling out the 100-plus questions on the Free Application for Federal Student Aid isn't exactly a walk in the park. However, two recent changes aim to ease the process, especially for first-timers. Read on to discover how Uncle Sam has taken pity on the FAFSA-challenged, what the changes are meant to accomplish, and how students and parents should respond.
Change No. 1: You no longer have to wait until the new year to submit a FAFSA
Traditionally, parents and students have been forced to wait until at least Jan. 1 to file their FAFSA for the upcoming school year. So the earliest they could submit requests for aid for the 2016-2017 school year was Jan. 1, 2016.
Now, FAFSAs can be submitted as early as Oct. 1 of the preceding year. That means you have an additional three months' lead time -- and starting today, you can start applying for the 2017-2018school year. To be crystal clear, Oct. 1 is not the deadline for submitting a FAFSA; it's the earliest date on which it will be accepted. For the 2017-2018 FAFSA, the deadline remains June 30, 2018.
Why the change? It's meant to help students know an all-important number called the "expected family contribution," or EFC, earlier in the college application process. When making financial aid decisions, colleges take a student's EFC and subtract it from the total cost of attendance. The number that remains is used to determine eligibility for need-based aid, including loans, grants, and work study.
Knowing their EFC earlier may help students decide where to apply. For instance, students with high EFCs may steer clear of pricey private schools, while students with low EFCs may consider options previously thought to be outside their price range.
Filing the FAFSA earlier won't necessarily mean getting colleges' aid offers any sooner than the usual time, which is typically mid-spring. Though the Department of Education hopes to see aid packages offered earlier, it has also advised schools against moving up their priority financial aid deadlines. Officials say they want students to have more time to make decisions before applying, fearing deadline creep will shut out those who need help the most.
Change No. 2: You'll fill out the FAFSA using earlier tax data
Previously, submitting a FAFSA often required parents and students to consult their financial crystal balls. Under the old system, those seeking aid for the 2017-2018 school year would have to provide estimates of figures that would end up on 2016 tax returns -- which aren't due, of course, until April 2017. Now, the FAFSA will require "prior prior" tax-year data. In other words, the 2017-2018 FAFSA will use numbers from 2015 tax returns. That means even families who requested an extension for their 2015 taxes will have concrete numbers to use at FAFSA time.
Cutting out the need for estimated data should drastically reduce the number of FAFSAs that are flagged for additional review, which can stall the application long enough for students to miss some colleges' deadlines. It will also let many students and parents take advantage of the IRS Data Retrieval Tool, which automatically populates many of the lines on the FAFSA, minimizing the potential for mistakes.
The (very) early bird gets the worm
It may feel odd to fill out the FAFSA before most students even start their first college applications, but there's little to gain -- and potentially much to lose -- by waiting. Many schools and states require the FAFSA much earlier than the deadline in order to give out their own aid on a first-come, first-served basis. (You must check with individual schools, but many state deadlines are on the FAFSA website.) And because of the FAFSA's earlier availability, there's a chance those other deadlines may creep up.
Bottom line? Double-check your deadlines, and then start filling out that FAFSAas soon as you possibly can.
The $15,834 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $15,834 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after.Simply click here to discover how to learn more about these strategies.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.