The deadline for incoming and current Yale students to apply for financial aid may come earlier next year as a result of the U.S. government’s decision to consider earlier tax returns in calculating federal student aid.
In September, President Barack Obama announced that students will be able to file a Free Application for Federal Student Aid using tax information from two years prior, beginning in October 2016. Before the change goes into effect, students can only file for aid using prior-year data, which is only complete after Jan. 1 of the current year. Students submitting documents before the new year have to base their application on income estimates from the year that had not yet ended. The switch to considering prior-prior year data will allow students to submit their data sooner and will enable financial aid offices to draw on a more complete picture of students’ finances in assembling their award packages. The changes will go into effect for students enrolling in college during the 2017–18 academic year.
Director of Financial Aid Caesar Storlazzi said the changes can streamline the process by shifting the federal financial aid timeline back by three months, aligning it more closely with the College Board’s application cycle. Having the data available earlier will allow administrators to consider a full year’s income data rather than simply an estimate.
“Students can give us everything we need sooner,” Storlazzi said. “We hope to be able to push back the application procedure for continuing students so that we can get a jump on the needs analysis.”
Storlazzi added that considering prior-prior year information will save his office hours of work, as financial aid officers will not have to go over applications again once the data has been finalized.
To assemble aid packages, Student Financial Services uses a formula to estimate how much aid students will receive from the government. SFS then factors this estimate into its own financial aid calculation. However, Yale financial aid officers must go back after the student submits updated data and confirms the information to finalize the aid package. Since the federal government will accept the FAFSA from Oct. 1 this year, Yale will be able to calculate the packages using finalized information.
Some colleges and universities nationwide have floated the idea of moving their admissions deadlines up to correspond with the earlier start date on financial aid, Storlazzi said. However, Yale’s application deadlines will remain unchanged in the 2016–17 academic year, according to Dean of Undergraduate Admissions Jeremiah Quinlan.
Mark Kantrowitz, an expert on student financial aid who has testified before Congress about federal financial aid policy, said the shift to prior-prior year tax information will be beneficial for families and administrators alike.
“There may be some bumps in the road as people get used to the new system, but I expect that people will really like the fact that it’s better aligned with the college calendar,” Kantrowitz said. “It’s an easier process, and this is just the first step in increased simplification.”
The new regulations may adversely impact families that posted higher incomes in the prior-prior year. Since the income reported on the FAFSA is meant to be representative of income during the school year, only one year can be considered, and families whose income has gone down may not receive aid that reflects their most recent financial circumstances.
However, Kantrowitz said families whose yearly income fluctuates wildly from year to year may be able to appeal to colleges to have a different year considered or submit an average of incomes from several years. Overall, he said, administrators will have more time to spend helping students with unusual financial situations which require individual attention.
“There’s going to be a lot less stress on the financial aid office,” he said.
Nearly 2,800 undergraduates currently enrolled at Yale are on financial aid.