One Small Step for FAFSA, One Giant Leap for Students

When I worked in the College Planning Center in Boston’s public library, students started trickling in as early as October with questions about how they could apply for financial aid for the next academic year. We would have to turn them away explaining that the Free Application for Federal Student Aid, known as the FAFSA, wouldn’t be available until January and they’d only be able to fill it out once they’d filed their taxes. We would remind them to come back and see us. We hoped they would and wouldn’t be among the countless students to fall through the cracks, never applying for financial aid, never making it to college.

By February, that trickle of students would turn into a flood as people rushed to make state and institutional deadlines for aid which oftentimes occurred by March. At this point we would have to turn people away. There were not enough hours in the day, not enough capacity on the ground to help ensure they had filed their taxes in time to make the financial aid deadlines. Would just the fact that we weren’t able to help them apply for aid mean that they wouldn’t make it to college? Even though there wasn’t a way to know for sure, the whole process felt frustrating for everyone. According to the U.S. Department of Education, an estimated 2 million students who are enrolled in college and would be eligible for a Pell Grant never applied for aid. This does not include the unknown number who failed to enroll in college because they didn’t know their aid eligibility.

Today, the Obama administration made an announcement that could fundamentally change the way students apply for federal financial aid, one that removes some of these barriers that faced the students we saw at the College Planning Center. The idea is simple and has been floating around for some time—making the FAFSA available sooner, and allowing the use of Prior-Prior Year taxes when filling it out. This would enable students to apply for aid earlier, aligning financial aid packages with college admissions, and illuminating much sooner what sorts of federal aid students will be eligible for to help them pay for college.

Currently, students are only able to apply for financial aid starting January 1st of the year in which they plan to enroll. So for a student looking to attend for academic year 2016-2017, the FAFSA will only become available in January 2016. This makes it so that by the time a student gets their admissions information and their financial aid package, they have very little time to decide whether that college will be the right fit for them financially. To make matters worse, in order to fill out the application in January 2016, students (and their families depending on if they are dependent) will have to have already filed their 2015 taxes. Anyone who has ever been beholden to an employer for a W2 will understand how difficult it is to swiftly file your taxes as early as January or February. It’s important that students fill out the FAFSA as quickly as possible in January through March because many states and institutions request that students file their FAFSAs as early as possible to be eligible for institutional and state aid.

Over the past few years the Obama administration has taken some important steps to make the FAFSA more student-friendly. This includes making the form shorter, introducing skip logic to the electronic form to ensure that students only have to fill out the minimum amount of questions for their financial situation, and introducing an IRS data retrieval tool that links up with tax data to pre-fill much of the form. The data retrieval tool has been instrumental because it prevents students from having to track down a lot of paperwork and figure out how to fill out much of the FAFSA using tax forms. These changes were a huge improvement, but left many students in the dark because it still operated under an arbitrary January 1st timeline with recent taxes being the necessity to fill out the form.

Starting in 2016, this all will change. Students will be able to use Prior-Prior Year taxes to fill out the FAFSA starting in October, around the same time many apply to college. This means in October 2016, students can use their 2015 taxes to fill out the form for the 2017-18 academic year. The result? Students can apply much sooner, use the data retrieval tool, and find out their aid eligible well in advance of their ultimate college enrollment decision.

Working at the College Planning Center nothing frustrated me more than arbitrary barriers to college access. It’s why I went into education policy—to help change some of the policies that inhibit student success on the ground. The simple, but important, change announced by President Obama today can do so much to remove unnecessary barriers and ensure that students know their aid eligibility and how to finance college in a timeline that works best for them. And I mean it sincerely when I say, "Thanks, Obama.""

Author:

Rachel Fishman is a senior policy analyst with the Education Policy program at New America.