Feds to update timeline for student aid application
With the aim of helping more Americans see college as an affordable option, President Barack Obama announced a new initiative to align the Free Application for Federal Student Aid due date more closely with college applications.
Obama’s plan, which he announced Monday in Iowa, would potentially move FAFSA’s application date to October — rather than its current January due date, which falls months after students have already applied to college. The changes will go into effect in the 2017-2018 fiscal year.
FAFSA is a mechanism to check students’ eligibility for federal and state government scholarships, grants and loans. It is also used by higher education institutions to determine how much financial aid to allot students.
Packing college acceptances with delivery of financial aid packages is something that the University has been working toward in the last year. In an interview with The Michigan Daily earlier this month, University President Mark Schlissel said these efforts could result in “modest incremental changes in the direction of diversity.”
As a result, Kedra Ishop, associate vice president for enrollment management at the University, sees the announcement as positive for both higher education institutions and students.
“The president’s order makes the financial aid timetable much more palatable for families and will broaden what they think is possible for themselves,” she said. “This is a win-win for both our University and our students and families.”
FAFSA has already changed dramatically under the Obama administration. Last January, the president announced significant cuts to the application’s length, shaving the process down by approximately 20 minutes to make applying easier and faster.
University alum Cecilia Muñoz, director of the White House Domestic Policy Council, and Arne Duncan, U.S. Secretary of Education, further explained the new initiative in a media phone conference Monday afternoon.
Muñoz said the administration decided to change FAFSA’s due date because the current January deadline falls during a time where filing taxes for most families coincides with FAFSA deadlines and the release of college decisions.
“These changes will essentially eliminate the largest roadblocks to FAFSA completion, as well as this truncated time period during which people — students and their families — are making what could be the most important financial decision of their lives,” Muñoz said. “So this administrative effort is going to mean an easier, and earlier, FAFSA.”
Currently FAFSA uses a tax retrieval tool to fill-in financial information, which is only available to families after they have filed their taxes. Four-million students currently file their FAFSA information prior to their taxes.
Now, family income information will be evaluated from each of the two years prior to a student’s college application — or “prior-prior year data” — to determine if income has changed significantly over that period of time. The change will make it easier for families to record their financial data.
Mark Kantrowitz, senior vice president and publisher of edvisors.com, is an expert on student financial aid and said the shift to using prior-prior year data will have a serious impact on students’ financial aid and graduation rate.
“Prior-prior year will also yield an improvement in college graduation rates,” Kantrowitz said. “Currently, about 2 million low income students don’t file the FAFSA, even though they would qualify for a Federal Pell Grant. Some don’t do it because of the complexity of the form. Some don’t do it because they are enrolled at low-cost colleges and think they can work their way through college. But people who work a full-time job are half as likely to graduate as students who work 12 hours or less a week. Some don’t do it because they think they aren’t eligible for grants, just for loans. So, making the process easier will encourage more students to file the FAFSA. If these students then use the financial aid to reduce their work hours, they will be more likely to graduate.”
Duncan said he believes the changes will help students and families make more informed decisions earlier.
“We think this small step to make students' lives easier could have a huge impact over time,” Duncan said. “We’re estimating that over the next several years, literally hundreds of thousands of additional students will actually gain access to critical student aid each year because more students and their families will find it easier to apply for that aid. That’s financial aid that students absolutely need and deserve, and that historically, sadly, they were leaving on the table.”
Pamela W. Fowler, executive director of the University’s Office of Financial Aid, said the University is eager to get started with the new changes.
“Those of us in the higher-education field have advocated for this change for some time,” Fowler said. “This is a positive move for our students and families and will allow our prospective families to assess their financial situation earlier in the decision-making process.”