Early FAFSA: the good, the bad, and the ugly

New process generates some extra work for financial aid offices

This past fall marked the introduction of a new FAFSA that allows students to use their prior-prior year tax data to file for financial aid three months earlier.

The good

The impetus behind the early FAFSA was the theory that if students were to receive financial aid offers earlier, they would be more likely to enroll in school. It seemed like a win-win: More students getting advanced education and greater enrollment for schools.

The change has been largely well received. And at a time when students lose out on billions of dollars by failing to fill out the FAFSA, the process seems ripe for change.

The bad

However, a few months into the new FAFSA, institutions' financial administrators are grappling with some challenging side effects.

The new process allows students to use two-year-old tax information—what's called prior-prior year information. This streamlines the process for students, but the older tax documents have often been amended for various reasons. Every change creates a flag in the system that administrators must investigate and respond to, for example, by changing a student's financial aid offer.

Though the FAFSA is increasingly available through automated and mobile systems, administrators still must investigate the flags manually.

The ugly

The changes have put a significant burden on these administrators, especially in the cases where a high number of applicants are low-income students eligible for Pell Grants.

Apart from the burden on staff, updates to financial aid packages could also take a significant toll on the students affected.

If and when a student's income data does change, the typical loss of financial aid in the form of Pell Grants is around $2,000, says Jennifer Buckles, the director of financial aid at the University of Tennessee at Chattanooga.

"These are not students who have $2,000 that they can just come up with," says Buckles.

In these scenarios, institutions have been trying to find funds to cover the gap so that the student's ability to enroll is not affected. But in the cases where one institution ends up with many students in this situation, the institution cannot accommodate every case (Kreighbaum, Inside Higher Ed, 1/4).

Early FAFSA creates an unpredictable year for enrollment managers

Expert Insight

Prior-prior year FAFSA

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