This afternoon, President Barack Obama announced a major change to the Free Application for Federal Student Aid (FAFSA): as of October 1, 2016, students will be able to complete the FAFSA up to three months earlier and will be able to use "prior-prior year" income information from the previous year's tax return, rather than waiting until the next year’s tax season, to evaluate their financial aid picture in making a college choice.
Scholarship America has worked with other like-minded partner organizations to advocate for this change in policy. "Ensuring a robust financial aid system that works for students" is a major priority in our Public Policy Agenda released this past spring, which also specifically calls for increasing access to federal financial aid by simplifying the FAFSA and allowing the use of prior-prior year tax data.
The Agenda, created with input from Scholarship America’s partner scholarship programs and national network of Dollars for Scholars affiliates, among others, is part of a larger vision to more fully engage the private sector in advancing programs and policies that increase equity in postsecondary education and help students overcome barriers to access, persistence and attainment.
Today’s announcement to release the FAFSA much earlier and allowing the use of Prior-Prior Year data is an important step to improve the process for both students and scholarship providers. Students will now be able to complete their financial aid application in the fall of their senior year, instead of waiting until spring -- giving them an earlier start on the process, as well as one less thing to worry about during the busiest part of their year. Since students can now access information about their federal aid eligibility earlier, scholarship providers will also now have more information available to them to make earlier award decisions, all of which will benefit students.
According to Max Espinoza, Scholarship America’s Senior Vice President of Education Programs & Policy:
"This action by President Obama represents a major victory for students and families aspiring for college opportunity and the American Dream. With the early FAFSA and the use of 'prior-prior information,' students will know about their financial aid when they need it most, with more ease and less confusion. Scholarship America will encourage all of our affiliates and partner organizations to boost the impact of this important change and align their scholarships to the early release of FAFSA. Scholarships often fill critical gaps in college financing that other financial aid is unable to cover and these FAFSA changes allow the private sector to partner more strategically with government and colleges to support college opportunity for all students."
Scholarship America is committed to boosting the impact of this important change. To help align community and private-sector scholarship providers with the new FAFSA schedule, Scholarship America is committed to encouraging 1,200 scholarship and educational assistance providers – which gave 125,000 students a total of $236 million in 2014 – to accelerate their application periods to align with the early FAFSA. Scholarship America will also encourage 100 percent of its 532 Dollars for Scholars affiliates – which distributed $18.5 million to 24,800 students in 2014 – to shift to earlier scholarship application periods, and host events across the country to help students complete their FAFSA.
The White House announcement outlines more details:
"Beginning on October 1, 2016, students can apply for financial aid a few months after they and their parents file their 2015 tax returns with reliable information retrieved electronically from the IRS, rather than waiting until the next year’s tax season to finalize their FAFSAs and to learn about their financial aid. Giving students and families the ability to submit their FAFSAs earlier and to use earlier income data, commonly referred to as 'prior-prior' year, will have several important benefits," including simpler applications, a growth in Pell Grant distribution and a reduced burden on college financial aid processors.
To learn more, you can read the White House statement on prior-prior year and other financial aid simplifications. Additional background on the initiative can be found on pages 9-11 of Scholarship America's Public Policy Agenda.