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President Obama recently announced that some significant changes will be coming to the FAFSA as of next year, one of which will be the ability for students and their families to report tax income information from an earlier tax year, rather than just the prior tax year.
Under the current FAFSA, a person is only able report prior year (PY) tax income information. Under the PY policy, many students were not able to fill out the FAFSA until near April in order to wait for taxes to be filed, even though the form comes out on January 1.
Note: this policy will remain until the change takes place in October 2016, so you should continue to use PY on your FAFSA applications for this coming January’s FAFSA forms.
What Does Prior-Prior Year (PPY) Mean?
The change will allow students to report tax information from a prior-prior tax year (PPY) allowing tax information from two years ago.
This will also allow students and their families to fill out the FAFSA form earlier than ever before in hopes to have their financial aid packages before making college decisions.
It’s easiest to understand these two terms by breaking them down and comparing them with one another to see the benefits of the switch.
Here’s a quick comparison between the current FAFSA, which operates with prior year data, or PY, compared to October 2016’s FAFSA change to prior-prior year or PPY:
Prior Year (PY)
Available spring semester; January 1
Only allows taxes from previous year
Students often file FAFSA & must make corrections to data once taxes are filed
Incorrectly aligned with college application calendar
Makes it difficult to meet priority filing deadlines, which must be met to qualify for some forms of financial aid
Financial aid information available nearing college decision deadline dates
Forced students & families to make more stressful and less-informed college & financial decisions
VERSUS
Prior-Prior Year (PPY)
Available fall semester; October
Allows taxes from two years ago
Taxes already filed and data is correct from previous year
Better aligned with college application calendar
Removes conflicts with priority filing deadlines, which must be met to qualify for some forms of financial aid
Financial aid information available further in advance of college decision deadlines
Will allow students & families to make more at-ease, informed college & financial aid decisions
If curious, you can learn more about the details of the new FAFSA changes on the FederalStudentAid website.
As always, we’ll keep you up-to-date on everything FAFSA on Fastweb, too!
RELATED ARTICLES
- President Obama Announces Changes to 2017-18 FAFSA
- FAFSA Checklist
- What You Need to Complete the FAFSA
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