If you’re planning on applying for FAFSA (a.k.a., the Free Application for Federal Student Aid) for 2018-2019, there are a few changes you should be aware of.
We spoke to John Haggerty, financial aid expert, to find out what students and parents need to know for the coming year.
John had two important pieces of advice right out of the gate.
First: don’t delay filling out the FAFSA. “A lot of schools are changing their deadlines for financial aid to allow for priority reviews,” John told us. “That’s why it’s a good idea to double check deadlines and apply early.”
Remember, you can apply for FAFSA as early as October first.
Second: make sure any tax information is correct, and use the shortcuts that are provided.
“Make use of the IRS Data Retrieval Tool,” John advised. “It will help schools verify your eligibility for Pell Grants and other aid. With the tool, all the info is imported from the IRS, so schools will know that the tax information is correct. And never guess when filling out tax information on the FAFSA. All the information needs to be verifiable.”
So what’s the scoop on this data retrieval tool John was talking about? We’ll fill you in, and tell you about a few other changes you can expect on this year’s FAFSA application.
Data retrieval makes a triumphant comeback
The IRS’s Data Retrieval Tool can be a huge time saver when filling out the FAFSA. This tool allows most applicants to directly import their parents’ tax information into the FAFSA form. And, as John mentioned, it can help schools verify applicants for grant eligibility.
The tool has been offline for several months due to suspected security issues. However, the Department of Education now reports that those issues have been addressed and that the tool has been enhanced with additional privacy safeguards for users.
For example, your tax return information will not be displayed on the Data Retrieval Tool web page or on your FAFSA form. Instead, fields will be populated with “Transferred from the IRS.”
Tax data will also not be shown on your Student Aid Report (SAR). (See more about data security from theDepartment of Education.)
The only downside? Not everyone will be able to use the tool. To take advantage of this feature, you must:
Have a valid Social Security Number
Have filed a 2016 federal tax return (both students and/or parents)
Have no change in marital status during 2016 (both students and/or parents)
Indicate a tax filing status of “already completed,” and
Answer “no” to follow-up questions that appear on the tool interface.
Other clarifications and changes
The Department of Education has also issued a few clarifications that may affect the way some people report their finances.
Starting with the 2018-2019 FAFSA application, students must report information for both parents if the parents are unmarried but living together. This applies to both biological and adoptive parents. This will close a loophole that may have allowed some students to only report one parent’s income.
Another clarification concerns students with undocumented parents. The Department of Education has directed that parents who do not have Social Security numbers should enter all zeros.
In addition, parents who do not file taxes will need to provide income information from their jobs or indicate earned income from the prior tax year.
Finally, the last change for 2018-2019: “Homeless youth” is now technically defined as a student aged 23 or younger. This is a change from 24 years old.
Homeless youth are frequently given dependency overrides, which means that they are evaluated for financial aid without regard to their parents’ financial status. This can potentially qualify some people for additional financial aid.
The most important thing to remember about FAFSA
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Jon is a writer and marketer for Nitro who is passionate about bringing transparency to the student loan process along with providing families with the information needed to make smart financial decisions. He also just recently refinanced his student loans allowing him to pay them off 5 years faster all while saving an additional $152/month. As he continues to pay them off himself, he strives to help others do the same. Jon also has a long history of connecting people with educational opportunities to help them improve their careers and their overall personal finances. In his free time you can find him reading travel blogs and researching destinations around the world in search of his next adventure. Read more by Jon O'Donnell