September 06, 2016

The Free Application for Federal Student Aid (FAFSA) is Changing

Kids are heading back to school, adjusting to new schedules, new teachers and new classrooms. For high school seniors in the college planning process, there is another big change coming and the benefits could be significant when paying for college. The Finance Authority of Maine (FAME) wants Maine students and families to know that the Free Application for Federal Student Aid (FAFSA) process is changing. Instead of waiting until the new year to file the FASFA, families can now file it beginning on October 1, 2016. In addition, students will be able to file using an earlier year’s tax information. The FAFSA is the form that families must submit  to apply for federal grants, loans, and work-study funds for college students. It is administered by the U.S. Department of Education, which provides more than $150 billion in student aid each year. In the past, students typically had to wait until January 1 for the FAFSA to become available so they could begin the financial aid application process. This late timing often  resulted in students receiving their financial aid awards very late in the college decision-making process, potentially causing students to choose a school hastily and thereby take on more student loan debt than might have been necessary. “Completing and submitting the FAFSA is the single most important thing a family can do to get assistance paying for college, and it’s one of the best ways to minimize student loan borrowing,” said Martha Johnston, Director of Education for FAME. “Too often, we see students who don’t complete the FAFSA or submit it late and miss critical deadlines and they often miss out on potential grants,” she added. Maine students left $11.5 million in Pell Grants on the table for the 2014-2015 academic year, according to NerdWallet. The average student debt in Maine is $31,000 per student, and 68 percent of Maine students graduate with debt. Helping Maine Families Find Money for Higher Education  What does this big change mean for Maine families in the college planning process?
  1. The financial aid process now aligns more closely with the college admissions process.
  2. There’s no longer a need to estimate income. Based on the old timeline, families were required to use the prior year’s tax information. Because a tax return for that year had often not yet been filed, families would estimate income (so as not to miss deadlines) and then go back into the FAFSA and update income information after taxes had been processed. For the 2017-2018 academic year, students and their families will report 2015 tax income information. This means that accurate, processed income information will be available when initially filing the FAFSA. In fact, students can use the IRS Data Retrieval Tool within the FAFSA to transfer 2015 income information from the IRS directly into the FAFSA.
  3. There may be more time to understand financial aid options: The hope is that students will know sooner how much aid they’ve qualified for and have more time to evaluate their options. Earlier notification is key to helping families make more informed decisions about where the student will attend school and how the family will pay for it.
  4. It removes some of the pressure families feel about the financial aid process, which has been tightly compressed into a 4-month period given the previous January 1 form release date and the May 1 college acceptance deadlines.
Help Sessions Provide Key Support Over the years FAME has assisted over 8,000 Maine families navigate the complex financial aid process. A big part of that support has been its free In-Person FAFSA Help Session series, which take place annually around the state. At those events, families can speak directly with FAME representatives and get help completing the FAFSA. This year will mark the 13th year of this impactful series, which begins on October 13 and continues for four weeks to November 10. A complete list of FAFSA Help Sessions is available here. FAME also offers families ongoing support online at Johnston concluded: “We encourage students to file the FAFSA as early as they can because some schools award aid on a first-come, first-served basis. There’s really no downside to filing early. Also students need to pay attention to financial aid deadlines. Many Maine schools have not yet announced their financial aid deadlines but they may be earlier than in the past because of this change.” About the Finance Authority of Maine (FAME): FAME is a quasi-independent state agency that provides innovative financial solutions to help Maine people and businesses pursue educational and business opportunities. FAME helps to lead the creation of good paying jobs for Maine citizens by working at the nexus between economic and workforce development.