FAFSA Reform

"Prior-prior year" and ability to apply months earlier than in the past are seen as ways to simplify the process.

September 14, 2015

The federal government, starting late next year, will allow students to apply for federal student aid based on their family’s income from two years earlier instead of the immediately previous year, the White House announced Sunday.

The Obama administration plans to change the federal aid process so that students can also submit their Free Application for Federal Student Aid, or FAFSA, as early as October for the school year beginning the following summer or fall. Currently students must wait until January.

President Obama will formally announce the changes at a town hall with high school students in Iowa on Monday.

The change will take effect for students and families seeking federal financial aid for the 2017-18 school year. Those students will be able to submit a FAFSA as early as October 2016 using their 2015 income, as opposed to waiting until January and having to finalize their families' 2016 taxes.

Colleges and universities, consumer advocates, financial aid counselors, the Gates Foundation and some congressional lawmakers had all pushed the Obama administration to use its executive power to adopt the changes.

Justin Draeger, the president of the National Association of Student Financial Aid Administrators, said Sunday that the switch to prior-prior year data on the FAFSA was “a big victory for our community.”

Other groups also praised the changes.

Molly Corbett Broad, the president of the American Council on Education, said in a statement the administration’s actions were “an important step that will expand postsecondary education options for low- and middle-income students and increase their awareness that a college degree is an affordable goal.”

Lauren Asher, president of the Institute for College Access and Success, said that the FAFSA overhaul “means students will be able to apply for aid earlier and more easily, and make better informed decisions about where to apply and how to pay for college.”

Education Department officials earlier this year said they supported the change, but were concerned about budget estimates that showed it would cost the government money.

Senator Lamar Alexander of Tennessee, the Republican who heads the Senate’s education committee, has previously endorsed the FAFSA changes the administration announced Sunday as part of his legislative plans to simplify and streamline the student aid system.

In a statement provided by his office on Sunday, Alexander said: “A bipartisan group of senators have been urging this for two years and intend to include it in the reauthorization of the Higher Education Act this year, including a way to pay for it.”


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