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Prior-Prior Year: Financial Aid Change for 2017-18

Introduction:

Prior-Prior Year refers to a change in the required financial data on the FAFSA beginning in the 2017-18 academic year. This change was announced by President Obama on September 14, 2015 in effort to give students more time to make the important decision about which university to attend. Historically, students have been required to provide the most recent tax information on their FAFSA. For example, the 2015-16 school year required 2014 data and the 2016-17 school year required 2015 tax data. In the following 2017-18 school year, the 2015 tax information will be required again so that the "prior-prior" year's tax information is required. Requiring prior-prior year information allows students more time to fill out the FAFSA. In fact, the FAFSA will be available by October 1, 2016 instead of the normal January 1st availability.  

A variety of changes to financial aid are necessary to note so that there will be minimal change to your financial aid award. This webpage will first explain the implications of Prior-Prior Year to your financial aid and then will detail examples so that you can see how this works. 

Conflicting Information Could Impact Your Grant Amounts:

Since the 2016-17 school year and the 2017-18 school year both require the same 2015 tax information, it is important that the financial data matches on both years of the FAFSA applications. For example, if you have a data mismatch, such as a different Adjusted Gross Income (AGI) in the 2016-17 and 2017-18 school years, then the Financial Aid Office would be required to find out which AGI you reported is correct. A change in your AGI could affect your financial aid awards in both the 2017-18 and the 2016-17 years! This means that your 2016-17 financial aid could be adjusted in the middle of the school year because of data placed on the 2017-18 FAFSA.

We want to mitigate any surprises in your financial aid as much as possible. For this reason, we highly recommend that you ensure your 2016-17 FAFSA information is correct. The most efficient way to do this is to use the Data Retrieval Tool through the FAFSA. The Data Retrieval Tool links your FAFSA data to the IRS database and ensures that the FAFSA data matches IRS records. Later, when you are ready to fill out the the 2017-18 FAFSA, you could use the Data Retrieval Tool again to ensure that all of the data was input correctly. Consult www.masters.edu/verify for instructions about how to use the Data Retrieval Tool. 

Please note: some data can be different between the 2016-17 and 2017-18 years if the data is not sourced in the 2015 tax information. For a list of the data that can be different on the two applications, please see the bottom of this webpage. 

New Students Could Receive Financial Aid Award Letters Earlier:

One of the benefits to the Prior-Prior Year change is that new students could receive their financial aid awards earlier. This can potentially give the students more time to compare financial aid awards between schools to make an informed decision about which school to attend. For this reason, some students may desire to complete the FAFSA when it opens on October 1, 2016. (The FAFSA normally would have opened on January 1, 2017.)

Conclusion:

In summary, the Prior-Prior Year system could potentially lead to conflicting information which the Financial Aid Office would need to resolve. Resolving that issue could potentially lead to a negative change in your 2017-18 and 2016-17 financial aid awards. Those potential changes to your 2016-17 financial aid could occur in the middle of the school year. In order to prevent that from happening we highly recommend using the Data Retrieval for your 2016-17 FAFSA at your earliest convenience. We also recommend using the Data Retrieval Tool for your 2017-18 FAFSA as early as October 1, 2016. Find instructions to use the Data Retrieval Tool on www.masters.edu/verify

We understand that this change to the FAFSA is technical and can be confusing. Please contact us with any questions so that we can assist you.  

Examples:

 The following examples are more technical and designed to give you a better grasp on how conflicting information could lead to financial aid changes. 

Pell Grant Example:

You entered your Adjusted Gross Income (AGI) on the 2016-17 FAFSA as $62,000, but you indicated on the 2017-18 FAFSA that the AGI was $64,286. Since there is a discrepancy, the Financial Aid Office would be required to determine the correct AGI and ensure that the correct AGI is reported on both the 2016-17 FAFSA and the 2017-18 FAFSA. It is possible that changing the AGI would change the Expected Family Contribution and thus change financial aid awards such as Pell Grant, Cal Grant, TMU Grant, and/or Subsidized Loans. These awards could be changed in the middle of the 2016-17 school year. For instance, the Pell Grant could be lowered if the AGI was increased. If the AGI of $62,000 was replaced by the correct AGI of $64,286, then the Expected Family Contribution could potentially increase by $1,000. If the student previously had $3,865 of Pell Grant and the Expected Family Contribution increased by $1,000, then the Pell Grant would be lowered to approximately $2,865. Even though you had relied on your financial aid for months, we would be required to make the necessary changes on your account. To mitigate this surprise, please use the Data Retrieval Tool or send us an IRS Tax Transcript immediately. Find instructions for both the IRS Data Retrieval and the IRS Tax Transcript on www.masters.edu/verify. 

Cal Grant Example 2:

You are in the military or pastorate and receive a housing allowance and you have four people in your family. You reported a $29,000 housing allowance for the 2016-17 FAFSA and a $35,000 housing allowance for the 2017-18 FAFSA. Since both years of the FAFSA should be pulling 2015 tax information, one or both of these reported housing allowances is incorrect. The Financial Aid Office would be required to collect documentation to verify the right housing allowance and then make the changes on the student's account. If the 2016-17 housing allowance of $29,000 was reported incorrectly and needed to be changed to $35,000, it could change the Expected Family Contribution and thus potentially change the amount of financial aid awarded in the 2016-17 year as well as in the 2017-18 year. This could practically apply in affecting a student's Cal Grant award. If the change of housing allowance increased the family's total income from $89,418 to $92,478, then a student could lose their Cal Grant award since the income threshold for a family of four (that is, $90,500) was exceeded by the correction. Note that we would uncover this discrepancy as early as October which means that we would potentially change your financial aid award even though you have relied on it for months without change. Completing the Data Retrieval Tool or sending us and IRS Tax Transcript before the 2016-17 school year begins can help reduce the chance of a change in your financial aid award.

Summary:

Many examples could be cited, but the data which would need to be consistent between the 2016-17 and 2017-18 FAFSA applications includes, but is not necessarily limited to: tax return type, filing status, adjusted gross income, income tax, exemption number, education credits, need based employment, grant/scholarship aid, combat pay, co-op earnings, housing allowance, veterans non-education benefits, other untaxed income, other non-reported money, pension payments, IRA payments, interest income, IRA distributions, and untaxed pensions.

One should also note that some data can be different on the 2016-17 and 2017-18 FAFSA applications; including: number in household, number in college, address, contact information, food stamp use, child support received, and child support paid.