FAFSA Changes: What you Need to Know about the New FAFSA

If you or your college-age child applied for financial aid using the FAFSA (Free Application for Federal Student Aid) form in the past, you're in for a few surprises this year. That's because the Department of Education overhauled the form for the 2017-2018 school year. The biggest changes? Deadlines and how you report your income.


FAFSA, a required application for federal financial aid including grants, student loans, and work-study opportunities, is also used by state governments, private organizations and colleges, and career schools to determine aid eligibility — as well as the type and amount of aid provided. Every family should complete the FAFSA form, regardless of income level, since doing so may result in a lower cost of higher education.


Here are four FAFSA changes worth noting.

1. FAFSA is available earlier

FAFSA forms will now be available beginning October 1 for the following academic year, aligning more closely with college application deadlines. For example, FAFSA will be available October 1, 2016 for the 2017-2018 academic year. How soon you need to turn it in depends on each college's deadline. The idea is that an earlier deadline will get you information about financial aid earlier than you would have in the past, which can help you make the decision about which school to attend. Colleges let students know about acceptances and financial aid packages at different times depending on whether they have rolling admissions or early decision or stick to a traditional February or March timeframe for notifying applicants.

2. FAFSA uses older tax data

Until this year, you and your parents were required to complete the form using income and tax information from the previous year. Now the tax and income information must come from the “prior-prior” year's taxes. In other words, you'll use your 2015 tax return to complete the form for the 2017-2018 academic year. When you're ready to apply for financial aid for the 2018-2019 school year, you'll be using your 2016 tax return.


If you haven't filled out a FAFSA form yet, be aware you do need to complete a new one every year to continue receiving financial aid. Make sure you are filling out your FAFSA correctly , starting with choosing the right form for the right year and providing the correct tax and income information.

3. The asset protection allowance will decline

While the above changes are meant to make FAFSA easier, families may find the change in the asset protection allowance less appealing.


The federal government's financial aid formula allows parents to have some portion of their savings and investment funds protected from being counted toward the money they are expected to contribute to their child's higher education. The amount that can be protected depends on the age and marital status of the parents, along with the number of dependents and other factors. That protection allowance has been declining in recent years and will be slashed further for the next academic year.


For example, a family that has $30,300 in asset protection for the 2015-2016 year could see that protection limited to $18,700 for 2016-2017. However, the “expected contribution” amount established by the federal government's formula depends more heavily on income rather than assets, so the actual change in financial aid for the student could be limited to a few hundred dollars.

4. Students gain privacy about their college choices

In previous years, the colleges you applied to would see your FAFSA on a list of the other schools you applied to. Often, schools would look at the list as a way of gauging student interest in their school and assume that the list was ranked in order of preference.


Financial aid experts say that colleges might offer less aid if their school appeared on the bottom of a student's list of schools. Now, only the federal government and state financial aid offices can see the list of colleges where you are applying. Colleges will still receive your FAFSA but they won't see that portion of your application. If you want to maximize your chances of getting financial aid from your state government or a state where you have applied to attend college, it makes sense to put at least one public state college on the list, according to financial aid advisers.


The Department of Education's Federal Student Aid Office provides comprehensive information about FAFSA and financial aid for higher education.


For more information about paying for college, check out or call 1-888-411-0266 to speak with one of our Student Lending Specialists today.

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