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What were the changes announced by the Obama administration in September 2015?



In September 2015, the Obama administration announced several changes to the FAFSA application process which took effect in October 2016.

The first change had to do with the tax information required by the FAFSA. Previously, the FAFSA application asked for student tax information and/or parent tax information for the year prior to the academic year. For example, the FAFSA for the 2015-2016 academic year asked for 2014 tax information, and the FAFSA for the 2016-2017 academic year asked for 2015 tax information.

However, beginning with the 2017-2018 academic year, the FAFSA asked for tax information for the year “prior-prior” to the academic year. For example, the FAFSA for the 2017-2018 academic year asked for 2015 tax information, and the FAFSA for the 2018-2019 academic year asked for 2016 tax information.

Note that this created a one-time anomaly, where 2015 tax information was required on two subsequent FAFSA applications. In particular, 2015 tax information was required for both the 2016-2017 and 2017-2018 academic years.

The second change had to do with the length of the FAFSA application filing window. Previously, the FAFSA application for a given academic year had an 18 month filing window. For example, for the 2015-2016 academic year, the FAFSA could be filed with the federal processor from January 1, 2015 to June 30, 2016.

However, beginning with the 2017-2018 academic year, the FAFSA could be filed three months earlier, extending the filing window to 21 months. For example, the FAFSA for the 2017-2018 academic year could be filed with the federal processor from October 1, 2016 to June 30, 2018.

Together, these changes meant that the common practice of estimating tax information, only to have to return and correct it after filing taxes, largely became a thing of the past. For example, a FAFSA applicant filing on January 1, 2016 for the 2016-2017 academic year would need to provide estimates for their 2015 tax information, since they would not even get their 2015 W-2 form until the end of January 2016. However, a FAFSA applicant filing on October 1, 2016 for the 2017-2018 academic year would provide 2015 tax information, which they would have finalized several months prior (by April 15, 2016), so no tax estimates would be necessary.

In summary:
  • Beginning with the 2017-2018 academic year, the FAFSA application asks for prior-prior year tax information, instead of prior year tax information.
  • Also beginning with the 2017-2018 academic year, the window of opportunity for filing the FAFSA application with the federal processor was extended from 18 to 21 months.

Finally, the Obama administration announced the College Scorecard, which is a new government collection of data on over 7000 colleges to help students and parents objectively compare colleges. Student Aid Application Services LLC integrates and displays this data to better serve you, including common sense numbers for each college like average annual cost, graduation rate, and average salary earned by graduates.


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