By Stacy Johnson
Applying for financial aid can be a messy, headache-inducing process for college-bound students. But it’s about to get a little easier.
The White House recently announced that beginning next year, students can file the Free Application for Federal Student Aid, known as the FAFSA, as early as Oct. 1, as the college application process for the next school year gets underway, and use tax information from the year before.
Previously, students had to wait to file until after Jan. 1, the date FAFSA forms were released, and after that tax season’s returns were processed. As a result, millions of college students have had to apply for financial aid before they and their parents filed their taxes — which means they have to use estimated incomes and then circle back with actual figures when they got them.
The new timeline will further streamline the financial aid application process by allowing students to use the IRS Data Retrieval Tool to automatically fill in several questions on the FAFSA form, making the process quicker and easier for prospective students.
The earlier submission date will allow students to get estimates of eligibility for federal grants and loans months earlier than now so they can figure out what colleges they can afford to attend.
“Learning about aid eligibility options much earlier in the college application and decision process will allow students and families to determine the true cost of attending college – taking available financial aid into account – and make more informed decisions,” the White House said in a press release.
The changes should reduce paperwork burdens for prospective college students and cut the costs for schools that previously spent time verifying estimated family income data on students’ forms, The Washington Post reports.
“Getting the form filled out earlier will make a real difference for students who think they can’t afford college,” Education Secretary Arne Duncan told reporters. “You have high-caliber students who don’t apply to elite colleges because they think they can’t afford them. Many elite colleges have larger endowments and can offer more financial aid… we think some of that under-matching will go away.”
The FAFSA changes come on the heels of another White House initiative, the College Scorecard, a new tool that allows users to compare schools based on their cost, graduation rates, financial aid and students’ post-college earnings.
Learn more about FAFSA changes.
Stacy Johnson is a personal finance author, speaker, and television news personality. His Money Talks News series has aired for more than 20 years on dozens of network affiliates nationwide. In addition to MoneyTalksNews.com, his personal finance articles and videos appear regularly on MSN Money, Yahoo Finance, Readers Digest, The Christian Science Monitor, The Street.com, and many others. Johnson has been awarded two Emmys and written three books, including Life or Debt, and Money Made Simple.
Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.