FAFSA/Financial Aid Update

FAFSA/Financial Aid Update

With the cost of college rising each year, many families look to financial aid to help pay for their student’s education. In order to qualify for financial aid — both from the federal government and/or from the college — students must file the Free Application for Federal Student Aid, or FAFSA.

A second form, the CSS/Financial Aid PROFILE, is used by almost 400 colleges, universities, professional schools and scholarship programs to allocate non-federal student aid.

Be on the lookout for free financial aid/FAFSA preparation workshops at your local high school, community college or town library.

Important changes to the FAFSA

Historically, the FAFSA was available on January 1 each year and required students and families to estimate tax information from the previous calendar year. The process changed last year and now the FAFSA becomes available on October 1 and students complete it using income information from two years prior (“prior-prior”).

This means that current high school seniors applying for financial aid for 2018-19 will use tax information from their parents’ and their own 2016 income tax returns. The same will be true for upperclassmen filing a FAFSA in order to renew their financial aid awards.

The earlier availability of the FAFSA means that colleges can offer a financial aid award at the same time that they offer admission to an applicant. This is an advantage for students applying to college. It gives them more time to compare financial aid awards and to appeal awards before accepting a spot at a college.

The CSS/Financial Aid PROFILE

The CSS/PROFILE is used by hundreds of private colleges and some public flagship universities to determine a student’s eligibility for the institution’s own grants and scholarships (which may be need-based, merit aid or a combination).

The CSS is also available to students on October 1 and also uses prior-prior year taxes for assessing a student’s financial need. In addition, the CSS collects estimates of the current year’s income for both students and parents and projected income for the following year as well, and some colleges may ask similar questions on their own financial aid forms.

The deadline for submitting FAFSA and CSS forms depends on each individual college — your student’s school may have a “priority filing” deadline. At some schools, the earlier a student submits the forms the greater the chances of receiving institutional financial aid.

Financial aid throughout college

If your student wants to continue receiving financial aid beyond the first year of college, they need to complete the FAFSA (and the CSS/PROFILE if it applies) each year. Students must refile the FAFSA to qualify for government aid — federal grants, federal student loans, federal parent loans, and work study — and institutional grants and scholarships.

There are a few reasons for this. Families experience job changes, increases and decreases in income, graduations, marriages, births and other life events that affect finances, taxes and financial aid eligibility. One simple but significant change in family circumstances that impacts aid is an increase in the number of children in your family attending college in a given year.

Financial aid formulas also change each year. If a college raises tuition, room, board, fees, etc., it must then adjust its COA (Cost of Attendance) which in turn affects the formula it uses to determine need-based aid. Your EFC (Expected Family Contribution, generated by the information you enter on the FAFSA) is also adjusted each year by the federal government using current statistical data.

Renewal tips

Your student will not have to start a new FAFSA every year. The renewal FAFSA is populated with the previous year’s personal and demographic information. Your student can access the form and its information by using the FSA ID that they used the previous year to file. Gather all documents, personal and financial, and prepare in advance by using the FAFSA on the Web Worksheet.

The CSS/PROFILE must be completed every year as well. Once your student has logged in to their account with their username and password, they can download a printable application worksheet that will help them gather all the pertinent information for renewal. For the schools that require the CSS/PROFILE, your student’s eligibility for merit aid is directly tied to this form.

If your student currently receives financial aid, the school will communicate directly with your student about procedures and deadlines for renewal. Information will also be available on the college or university’s Financial Aid Office webpage.

A problem with the IRS Data Retrieval Tool this past year has changed the way that tool is used to help students and families import tax return information directly into the FAFSA. Please click here for an update on the IRS Data Retrieval Tool


529 savings accounts and financial aid

Is your family using 529 savings accounts to help pay for college? Good news: the FAFSA changes will give you more flexibility about which accounts to draw on when.

You may already know that qualified distributions (payments) from parent- or student-owned 529s are not reported as income and are ignored by the FAFSA formula when calculating your EFC. However, qualified distributions from 529s owned by a grandparent or third party count as untaxed student income on the FAFSA and can decrease your student’s financial aid.

For this reason, in the past families were advised to hold off until the final year of college to tap into grandparent 529 accounts. Now, with prior-prior year tax information being used on the FAFSA, families can use grandparent or third party 529s to finance the last two years of college without it impacting FAFSA formulations and the student’s financial aid eligibility.

Always file the FAFSA even if you think your family might not qualify for federal aid. Colleges use this form when disbursing their own scholarship and grant funds. Even if your student didn’t receive financial aid the previous year, they might qualify for merit aid based on academic performance while in college.



Suzanne Shaffer

Suzanne Shaffer counsels parents and students in the college admission process and the importance of early college preparation. Her blog, Parenting for College, offers timely tips for parents and students and provides parents with resources to help their college-bound teens navigate the college maze. Suzanne is a regular contributor as a college prep expert and parent advocate to TeenLife Online Magazine, College Focus, Noodle Education and CollegiateParent. She is also the Parent College Coach for Smart College Visit.


  1. Hello, I am a single parent and through the FAFSA my son is getting financial aid for his first semester/year 2017 since he was 17. For the new year since he is now 18 can he do his own FAFSA and maybe get more financial aid, how does that work? Thank you.

    • Your son can fill out his own FAFSA but will still be required to include information about parental income unless he is “emancipated” (not a dependent for tax purposes, and not receiving any financial support from parents). He does need to fill out a new FAFSA each year and any other financial aid renewal forms required by the school.

      Diane Schwemm

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