Lawmakers Recommend that FAFSA Start Using “Prior-Prior Year” Financial Data

Policy
Posted By Abby Perkins on June 19, 2015 at 12:54 pm
Lawmakers Recommend that FAFSA Start Using “Prior-Prior Year” Financial Data

In an effort to make financial aid easier for students to obtain, a group of 53 lawmakers sent a letter to Education Secretary Arne Duncan urging the Department  of Education to allow students to fill out the Free Application for Student Aid (FAFSA) earlier by using an older set of financial information instead of the current requirement of the previous year’s data.

The details of the request

The specific request from the 51 Democrat and 2 Republican lawmakers was to allow students to use “prior-prior year” data when completing the FAFSA form. In other words, rather than the current requirement of using the previous year’s tax return, students should be able to use tax returns from two years prior.

The reason for the request? The deadline for applying for financial aid in many states is well before the April 15 tax deadline, and some states begin processing financial aid applications as soon as January 1. Most students must also use their parents’ financial information, and do not have control over when tax returns are filed.

Impact on students

In addition to making the FAFSA simpler to complete by using financial information that would be more readily available, this proposal would allow students to file more accurate applications, as they would not be scrambling for documentation. In most cases, it is unlikely that a student’s financial information would change drastically over the course of a single year, so the update would not pose significant changes to financial aid packages.

Filing early also will allow students to have more access to financial aid that is distributed on a first-come-first-served basis. It could also potentially supply low-income and first-generation students with better aid, as well as more information with which to make decisions when choosing where to apply and enroll.

Benefits for schools and government

The lawmakers’ letter points out that a recent higher education task force identified the financial aid verification process as a significant drain on financial aid offices, and the biggest burden on compliance officers. If students are using prior-prior year tax returns, the information has already been filed and verified by the IRS. This would significantly reduce the burden on financial institutions and schools, as well as students. It is also a method that could be implemented with virtually no disruption to the current process, so the impact would be immediate.

Opposition to the proposal

There has been very little in the way of opposition to the proposal to use prior-prior year data for FAFSA applications. Those who do oppose the move cite concerns about cost, although no specific concerns have been listed. Others who question the wisdom of the change, including the chair of the Senate Education Committee, agree with the use of prior-prior year data, but they do not support the measure because they would rather see it included with the reauthorization of the Higher Education Act as opposed to a stand-alone motion.

Image: Senator Elizabeth Warren kicking off FAFSA Day, 2014. Source: Massachusetts Department of Higher Education

Abby Perkins
Email | Twitter | LinkedIn Abby Perkins attended Davidson College, where she graduated with a B.A. and Honors in English and wrote for The Davidsonian newspaper. Abby's work has been featured on Yahoo! Finance and Entrepreneur. As Managing Editor, Abby is a regular contributor to the GoodCall newsroom, covering education and financial aid.

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