From the New York Times
After holiday celebrations are over, students who plan on attending college next fall should begin preparing for a looming financial chore: completing the document that is crucial for financial aid.
Known as Fafsa, which is short for Free Application for Federal Student Aid, the form is used to calculate how much students and their families are expected to contribute to the cost of attending college, and what sort of financial aid they will receive. “The Fafsa,” said Lauren Asher, president of The Institute for College Access & Success, “is the gateway to government aid and federal loans.”
The form for the 2016-17 school year becomes available online on Jan. 1, and filling it out as soon as possible helps families maximize the odds of qualifying for grants, scholarships and federal loans. Students seeking financial aid must file the form each year.
Applying early is important because some states have early grant deadlines, and some distribute aid on a first-come, first-served basis, Ms. Asher said. So waiting may mean students will miss out.
Although filing the form in early January is ideal, not all families are ready to do so. The form requires filers to use information from their federal income tax return from the calendar year that just ended — so, January filers would use information from 2015. But most people will not receive their W-2 forms and other information necessary to file a 2015 tax return until later in January, at the earliest.
This is the last year filers will face this situation. Starting in 2016, changes to Fafsa rules will eliminate this frustrating timing problem. The form for the 2017-18 academic year can be filed as early as Oct. 1, 2016, and will rely on income tax information from the previous tax year (or, in financial aid lingo, “prior-prior” year tax information). So next year, students will file two Fafsas — each using 2015 tax information.