Financial aid: for better or for worse
New FAFSA regulations create a sticky transition for LBCC’s Financial Aid Office.
The Department of Education (DOE) announced major changes to its financial aid application process in an attempt to simplify what can be a frustrating and confusing endeavor for students and their families.
Students can now submit their Free Application for Federal Student Aid (FAFSA) on Oct. 1, a full three months earlier than the previous Jan. 1 submission date.
This restructuring moves to prior-prior year awarding; calculating student aid and expected family contribution (EFC) using family income tax documents from two years previous. Students applying for aid in the 2017-18 year will use a 2015 tax return, the same tax return many students used to apply for this year’s aid.
“The intention behind prior-prior year is that it will be easier for students and parents to fill out the FAFSA because they will be able to use the IRS data retrieval,” said Elaine Robinson, LBCC financial aid director.
The accuracy provided by the IRS data retrieval tool should significantly lower the amount of students selected for verification.
Students who provided income estimates instead of IRS data on the FAFSA are selected at random by the Department of Education for an income verification process. This can be a difficult barrier for students trying to access financial aid funds.
“Thirty-two percent of our students are selected for verification by the Department of Education, that was for the 16-17 year,” said Robinson.
Depending on the institution, the new date could even allow opportunity for earlier admission decisions to colleges.
“People are going to have longer to turn in their tracking documentation, which is good,” said Robinson.
But this one-time double-dipping of the 2015 tax return has raised questions among college students, financial aid staff and college administrators nationwide.
Will this help, or will this hinder? Has navigating the financial aid system for the 2017-18 year just turned into a nightmare for staff and students?
While this tricky transition may mark the beginning of a smoother future process, here’s the caveat:
It could also mean financial aid paybacks by students who slipped the notice of income verification for the 2016-17 year.
“Financial aid officers have said this is crazy,” said Bruce Clemetsen. “We understand why you’re [the Department of Education] doing it, but at some point, we’ve gone through checks and balances. And if there’s a mistake, it shouldn’t be their mistake, it’s our mistake, we should have caught it a year ago.”
The DOE will flag applications of students who did not use the IRS data retrieval tool for the 2016-17 school year and did use it for the 2017-18 FAFSA application, but only if the reported income has changed drastically.
“The Department of Education is going to give us guidance on that,” said Robinson. “If you did a 2015 and you weren’t selected for verification, versus doing a 2015 and you are selected for verification, that is a conflict.”
Students who weren’t flagged the first time could end up owing grant money. However, if they do the FAFSA on Oct 1, it will allow the Financial Aid Office time to make adjustments for the coming winter and spring terms, relieving the need for the student to pay out of pocket.
The prior-prior year awarding will balance out in 2018-19, when FAFSA applications will be based off of 2016’s tax documents. For now, LBCC’s financial aid office is running two years at once.
“All financial aid offices are struggling with setup right now,” said Robinson.
Those involved with the financial aid disbursement are scrambling in an attempt to update processes and paperwork with unclear, muddled guidelines from the federal government.
Robinson says they will have to wait until the annual Federal Student Aid Conference in December to receive any clear answers.
LBCC will also not receive guidance on Pell Grant disbursement until January or February, so students should not expect their financial aid package information until the usual time in March or April.
“We’re opening the FAFSA faster, but we’re not getting the information to make awards on any accelerated basis,” said Bruce Clemetsen, vice president of student affairs at LBCC.
The transition may be difficult, but processes are in place to solve any arising issues in LBCC’s Financial Aid Office. Robinson believes LBCC will not see many payback situations.
“I cannot impress upon students enough to please read their Webrunner and be aware of our priority deadline dates,” said Robinson.
A student staying on top of their paperwork and remaining alert through the entire financial aid process is the best way to avoid any frustrating situations, according to Robinson. Turn in the 2017-18 FAFSA as early as possible to avoid a payback situation.
“What we want to make possible is the greatest access that students can have to whatever financial resources are out there. We will have to see how this impacts it,” said Greg Hamann, president of LBCC.
Article by Emily Goodykoontz.