For years, the FAFSA has become available on January 1st, and has required tax information from the prior year. However, taxes aren’t due until April 15th, and most people haven’t even received their required tax documents by January 1st — much less actually filed their taxes. This led people to need to estimate information for the FAFSA, and then correct it later if necessary.
There have been two recent changes to the FAFSA, both of which are designed to make this situation less complicated.
New Availability Date
As mentioned before, the FAFSA could previously be filed beginning January 1st of the year for which you want financial aid. For example, if you had started university in 2016, you could have filed the FAFSA beginning January 1st, 2016.
Now, the FAFSA can be submitted as early as October 1st of the prior year. If you’re starting college in 2017, you’ve been able to submit the FAFSA since October 1st of 2016.
The last day to file hasn’t changed; it’s still June 30th.
If you’ve been paying close attention, you may think that the earlier filing availability date poses more of a problem with taxes, not less. After all, if you don’t have your tax documents by January 1st, how on earth can you be expected to have them by October 1st of the previous year, a full three months earlier?
The FAFSA folks thought of this too. Instead of filing your FAFSA using the previous year’s tax information, you now need the information from the year before that (which is called the prior-prior year, as opposed to the prior year).
Under the old system, you would have needed to use 2016’s tax information to file your 2017 FAFSA (that’s the prior year).
Under the new prior-prior year system, you need 2015’s tax information to file your 2017 FAFSA. Because the information is from a year earlier, it’s much more likely to be done by the time the FAFSA filing period opens.
This makes filing your FAFSA easier, as you may be able to use the IRS Data Retrieval Tool rather than filling out the FAFSA manually. This isn’t possible without having filed the relevant taxes already, so the switch to using prior-prior year information makes this far more likely to be possible.