(US News) By Farran Powell —
With new federal financial aid changes in effect this year, colleges and universities are altering the way award letters are now handled.
The change for the 2017-2018 school year comes after the Obama administration switched the tax year needed for filling out the Free Application for Federal Student Aid, commonly called the FAFSA, the form that many schools use to determine financial aid awards.
Another change was the availability of the form. Previously, the form was available in January, but with the new guidelines its availability moved to October – three months earlier – catapulting some schools to move up their financial aid deadlines.
Financial aid experts say the new modifications align financial aid applications better with the college admissions season, allowing families with prospective students to receive award letters weeks or months earlier, depending on the school.
With the implementation of the new FAFSA rules, many colleges and universities have altered their timelines and updated procedures for sending students financial aid award letters.
Here are three changes prospective and current students can expect with their financial aid award letter for the upcoming 2017-2018 school year.
1. Early admission applicants are more likely to receive an “actual” award letter. “Students who applied for early admission and who are admitted are receiving actual financial aid award letters with their offers of admission, as opposed to estimated award letters like in previous years,” says Mark Kantrowitz, publisher and vice president of strategy at Cappex.com, a college and scholarship search website.
[Ask yourself these four questions before you apply early decision.]
Financial aid director Lynne Myers at the College of the Holy Cross, a private National Liberal Arts College in Massachusetts, says they’re now able to send out financial aid packages that will most likely not need a second review.
“In the past, we were operating off of estimated income information,” she says.
About a third of schools are packaging awards earlier for students who were offered an early decision acceptance letter compared with previous years, says David Levy, a spokesman for Edvisors, a website about paying for college.
2. Prospective students can expect to receive awards earlier from most schools.“Typically, we wouldn’t have put out preliminary award letters until February or March, but now we’re kind of like the private colleges. And getting stuff out early, so families can do some comparison in education,” says Marty Somero, director of financial aid at the University of Northern Colorado.
[Learn how to decode your financial aid award letter.]
Experts say students admitted in regular decision will mostly likely receive an award letter several weeks earlier – probably in early March.
“This will give them more time to make an informed decision about college affordability and other criteria before the May 1 decision day deadline,” says Kantrowitz from Cappex.com.
3. Some current students may receive a financial aid award adjustment in 2017-2018.“This has turned into a major headache for the school and for our students. Families are very frustrated when we deal with that issue,” says Somero from UNC.
With the new guidelines, verified taxes from two years ago often called “prior prior year” are now used to determine financial aid awards.
The 2017-2018 school year is unique in the transition to the usage of prior prior year since it uses the same exact tax year as 2016-2017; any discrepancy between the submitted version from 2016-2017 and the verified tax return used for the upcoming 2017-2018 year needs to be resolved.
Financial aid experts say this is a one-year problem with the new FAFSA; if information for federal aid was filled out incorrectly, then the institution is obligated to amend the award.
“If they put something different, then we have to resolve it,” says Francisco Valines, director of financial aid at Florida International University, who says there are around 600 students at FIU who will need their awards amended.
Experts say this error is happening mostly to families who didn’t use the IRS retrieval system when filing out the FAFSA last year.
Fixing this discrepancy is labor intensive, Somero says, “in terms of figuring out what changed and what didn’t change. And what is the impact on their current year aid, and what that’s going to do going into the future.”
Some schools have more and some have less in terms of students who need an award adjustment, he says.
Many financial aid administrators say if a federal award is reduced because of a discrepancy, then the school will try to make up the difference.
“Our commitment is to keep them whole, so if their Pell grant has to go down, then we’ll replace it with institutional funds. So it’s not costing them money. Fortunately, it’s just a one-time thing,” says Valines from FIU.
