School may have just started but it's time to start thinking about next year if your child will be in college.
That's because the date you can begin to file the Free Application for Federal Student Aid, or FAFSA, is three months earlier this year — Oct. 1. The FAFSA is used by schools to determine eligibility for student financial aid and is considered the most important document in getting help paying for college.
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It's advantageous to file it as soon as possible because some funding is distributed on a first-come, first-serve basis. New federal rules also change which year's tax information to use in the application.
A few things to know:
SO SOON? Yes. The FAFSA filing period used to open on Jan. 1 but it is now Oct. 1. You still have until June 30th to complete the form but again, filing early means a better shot at assistance.
Mark Kantrowitz, of the college information website Cappex.com, said that students who file the FAFSA during the first three months tend to get more than double the grants, on average, of students who file the FAFSA later.
WHAT ELSE? Students and their families will also be required to report income from an earlier tax year, which is intended to make the process easier.
When the FAFSA application period opened on Jan. 1, many families rushed to apply but didn't have all the necessary tax information and had to estimate it. Now applicants will use tax returns from one year earlier. So those applying for aid for the 2017-2018 schoolyear will use their 2015 income information instead of 2016.
WHAT DOES THIS MEAN? Families will be able to use the IRS Data Retrieval Tool to transfer information from their federal income tax returns into the FAFSA. This will not only simplify the form, but also reduce the likelihood that the FAFSA will be selected for verification, Kantrowitz said. Any data that comes unmodified from the IRS to the FAFSA will not be subject to verification. Skipping verification will save families and colleges time and hassle, he said.
He also notes that if 2016 income is lower than 2015, the family should appeal to the college financial aid administrator for a professional judgment review.
Completing the FAFSA earlier means families can receive critical information like the Student Aid Report (SAR) sooner, says lender Sallie Mae. The SAR includes the Estimated Family Contribution, or EFC, which provides a clearer picture about eligibility for financial aid as families make decisions about colleges.