Skip Navigation
Edvisors Star Logo
Edvisors Logo
  • Compare Lenders
      • Compare Lenders
      • Best Private Student Loans in February 2023
      • Student Loan Comparison: Federal Loans vs Private Loans
      • Parent PLUS Loans vs Private Student Loans
      • How Does Interest on Student Loans Work?
      • Private Student Loan Cosigner: Everything you Need to Know
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

      • Compare Lenders
      • Best Student Loan Refinance Companies for February 2023
      • Federal Student Loan Repayment Plans
      • Student Loan Forgiveness: How to Get Student Loans Forgiven
      • Repayment Plans for Private Student Loans
      • Parent PLUS Loan Forgiveness
      • View All Articles >
      refinance student loans with college ave get started

      This is an advertisement.

    • Private Student Loans
    • Refinance Student Loans
  • Plan for College
      • Is College Education Worth the Cost?
      • Most and Least Lucrative College Academic Majors
      • College Comparisons
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Measuring Academic Fit: Reach, Match and Safety Schools
      • Need-Blind Admissions
      • How Long is a College Essay
      • When are College Applications Due
      • How to Write a Good College Essay
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Filing the FAFSA 2023-24: A Simple Guide for Students
      • FAFSA Deadlines for 2023-2024
      • FAFSA FAQ - Your FAFSA Questions Answered
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Most Popular Scholarships for College Students in 2023
      • Apply for Free Scholarships for College
      • College Scholarships for Kids
      • Most Prestigious Undergraduate Scholarships
      • Las mejores becas para estudiantes hispanos y latinos
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • How to Pay for College
      • Tuition Payment Plans
      • Pros and Cons: Borrowing From My 401K to Pay for College
      • Paying College Tuition with a Credit Card
      • Best Ways to Pay for College Without Financial Aid
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Financial Aid Disbursement: When and How You Will Get It
      • Should I Pay Off My Student Loans Right Now
      • How to Minimize Student Loan Debt
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

    • Benefits of College
    • College Admissions
    • FAFSA
    • Scholarships
    • Paying for College
    • Student LIFE Blog
  • Student Loans
      • Filing the FAFSA 2023-24: A Simple Guide for Students
      • FAFSA FAQ - Your FAFSA Questions Answered
      • FAFSA Deadlines for 2023-2024
      • FAFSA School Codes
      • FAFSA 2023-2024 Guide & Resources
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

      • Best Private Student Loans in February 2023
      • Student Loan Comparison: Federal Loans vs Private Loans
      • Parent PLUS Loans vs Private Student Loans
      • How Does Interest on Student Loans Work?
      • Private Student Loan Cosigner: Everything you Need to Know
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

      • Filing the FAFSA 2023-24: A Simple Guide for Students
      • FAFSA FAQ - Your FAFSA Questions Answered
      • The complete guide to federal undergraduate student loans
      • What are Federal Parent PLUS Loans and How to Apply?
      • Financial Aid for Graduate School
      • Compare Subsidized and Unsubsidized Student Loans
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

      • Best Student Loan Refinance Companies for February 2023
      • Federal Student Loan Repayment Plans
      • Student Loan Forgiveness: How to Get Student Loans Forgiven
      • Repayment Plans for Private Student Loans
      • Should You Refinance Federal Student Loans?
      • Parent PLUS Loan Forgiveness
      • View All Articles >
      • Sallie Mae Student Loan Review
      • College Ave Student Loan Review
      • SoFi Student Loan Review
      • Ascent Student Loan Review
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

    • FAFSA
    • Private Student Loans
    • Federal Student Loans
    • Repay Student Loans
    • Lender Reviews
  • Credit Cards
      • Petal® 2 Visa® Credit Card Review
      • SoFi Credit Card Review
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Best Credit Cards for 2023
      • Best Cash Back Credit Cards
      • Best 0% Introductory APR Credit Cards
      • Best Secured Credit Cards for 2023
      • Best Balance Transfer Credit Cards
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • How to Build Credit?
      • What Age Can You Get a Credit Card?
      • What is a Secured Credit Card?
      • What is an Unsecured Credit Card?
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

    • Card Reviews
    • Best Credit Cards
    • Credit Card FAQs
  • Money Management
      • Best Budgeting Apps
      • Budgeting Tips
      • Budgeting for Beginners
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Financial Goals
      • How to Save Money as a College Student
      • What is an Emergency Fund
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • How to Pay Off Debt
      • Debt Relief
      • What is a Debt Management Plan
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • How to Check Your Credit Score
      • Best Credit Building Apps
      • What is Credit?
      Self Credit Builder: Build Credit. Build Savings. Build Dreams.

      Sponsored Ad

      • Investing for Beginners
      • Best Investment Apps
      • Understanding the Stock Market
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • What is Risk Management
      • How to Prevent Identity Theft
      • What is Insurance
      Info compromised in a breach? Don't compromise on identity theft protection.

      Sponsored Ad

    • Budgeting
    • Saving
    • Debt Management
    • Credit
    • Investing
    • Risk Management
Search Box Form
School Search Form
Advertisement Disclosure
Advertisement Disclosure
×

Edvisors (“Edvisors Network, Inc.”) provides independent advertising-supported platforms for consumers to search compare and apply for private student loans. Loan offers from participating lenders that appear on our websites are not affiliated with any college and/or universities, and there are no colleges and/or universities which endorse Edvisors’ products or services. Lender search results do not constitute an official college preferred lender list. Edvisors receives compensation from lenders that appear on this site. This compensation may impact the placement of where lenders appear on this site, for example, the order in which the lenders appear when included in a list. Not all lenders participate in our sites and lenders that do participate may not offer loans to every school.

Edvisors is not a lender and makes no representations or warranties about your eligibility for a particular loan or financial aid. Lenders are solely responsible for any and all credit decisions, loan approval and rates, terms and other costs of the loan offered and may vary based upon the lender you select. Please check with your school or lender directly for information related to your personal eligibility.

Edvisors has endeavored to provide accurate information. However, the results provided by lenders are for illustrative purposes only and accuracy is not guaranteed, as such, Edvisors assumes no responsibility for errors or omission in the information provided.

×
Get Your Free Guide to Filing the FAFSA Today!

Thank you for your interest in Edvisors' 2020-2021 Guide to Filing the FAFSA.

Please complete the form below to access your free copy.

Thank you! Click here to download your free FAFSA Guide.

I am a:

×
College knowledge starts here!

Enter your email below to receive your Student Loan Handbook from Edvisors.

Please check your email for the Student Loan Handbook.

After Navigation
Home Blog Switch to Prior-Prior-Year Income and Tax Data Allows Earlier Filing of the FAFSA
  • Contents
  • Better Alignment of College Admissions and Financial Aid Applications
  • Transition to Prior-Prior Year
  • History of Prior-Prior-Year
  • More Simplification Needed

Switch to Prior-Prior-Year Income and Tax Data Allows Earlier Filing of the FAFSA

edvisors star logo
By Edvisors Network
September 14, 2015
Email This Article
Fill out the form below to send a copy of this article to your email.
By clicking "Submit" I have read and agree to the Edvisors' Terms of Use and Privacy Policy. We strongly encourage you to read our Privacy Policy to understand how we use and share your information.
A copy of this article has been sent to your email.

President Obama announced on Monday, September 14, 2015, that the FAFSA (Free Application for Federal Student Aid) will switch from prior-year (PY) to prior-prior-year (PPY) income and tax data, starting with the 2017-2018 FAFSA. The use of older income and tax data will allow students to file the FAFSA three months earlier, starting on October 1 instead of January 1.

For example, instead of filing the 2017-2018 FAFSA on or after January 1, 2017 using income and tax data from 2016 federal income tax returns, families will be able to file the form on or after October 1, 2016 using income and tax data from 2015 federal income tax returns. Since most families will have already filed their 2015 federal income tax returns, more families will be able to use the IRS Data Retrieval Tool to simplify filing the FAFSA.

Note that this change in the start date for filing the FAFSA applies to both new and continuing students. 

Better Alignment of College Admissions and Financial Aid Applications

This change will better align financial aid applications with the start of the college admissions season. Students will be able to apply for financial aid before or at the same times as they apply for admission, allowing cost considerations to influence the choice of colleges.

It will also eliminate the need for complicated advice about when to file the FAFSA. Currently, students cannot file the FAFSA before January 1, but must file the FAFSA as soon as possible on or after January 1. Students who file the FAFSA in January, February or March tend to receive more than twice as much grant funding, on average, as students who file the FAFSA later. But, the FAFSA references specific lines on the federal income tax return, causing many families to wait until after they file their federal income tax returns to file the FAFSA.

Waiting to file the FAFSA after filing federal income tax returns causes some families to miss state and college deadlines for financial aid. Some states and colleges have very early FAFSA deadlines for their own financial aid funds. For example, three states have February deadlines, eleven states have March deadlines and nine states award their financial aid funds on a first-come, first-served basis until the money runs out. Even some federal student aid programs, such as the Federal Supplemental Educational Opportunity Grant (FSEOG) and Federal Work-Study (FWS), have fixed allocations per college, so the money runs out quickly.

Instead, applicants must use estimated income and tax information for the initial application. After filing their federal income tax returns, they may use the IRS Data Retrieval Tool to update the information on the FAFSA.

With the switch to prior-prior-year income and tax data, applicants will be able to use the IRS Data Retrieval Tool to prefill the income and tax questions on the FAFSA, streamlining the application process. This will eliminate the need for later updates to the FAFSA after the applicants and their families file their federal income tax returns. It will also avoid the need for verification of income and tax information. It may encourage students to apply for financial aid earlier, so that students can file the FAFSA before many state and college deadlines.

Transition to Prior-Prior Year

Since the switch to prior-prior year begins with the 2017-2018 FAFSA, there will be two FAFSAs in 2016:

  • The 2016-2017 FAFSA, with a start date of January 1, 2016
  • The 2017-2018 FAFSA, with a start date of October 1, 2016

Both of these FAFSAs will have 2015 as the base year.  For students filing the 2016-2017 FAFSA for the first time, the base year runs from January 1 of the junior year in high school (spring term) to December 31 of the senior year in high school (fall term). For students filing the 2017-2018 FAFSA for the first time, the base year runs from January 1 of the sophomore year in high school (spring term) to December 31 of the junior year in high school (fall term).

This change potentially causes complications for parents of high school juniors who were selling stocks and other investments in 2015, so that the capital gains would not affect eligibility for need-based financial aid when their children file the 2017-2018 FAFSA as high school seniors. The switch to prior-prior year means that the 2017-2018 FAFSA will be based on income in the 2015 tax year instead of the 2016 tax year. These parents will need to offset the 2015 gains with losses in order to avoid artificially increasing income during the base year. 

History of Prior-Prior-Year

The use of prior-prior-year (PPY) income and tax data was first proposed by Mark Kantrowitz in 1996, soon after he provided the U.S. Department of Education with a prototype implementation of an online FAFSA. FAFSA on the Web launched the next year, starting with the 1997-1998 FAFSA. (Mark Kantrowitz is also co-author of the bestselling book, Filing the FAFSA.)

But, the PPY proposal met with opposition from the National Association of Student Financial Aid Administrators (NASFAA) and the Advisory Committee on Student Financial Assistance (ACSFA). Colleges were concerned that using two-year-old data instead of one-year-old data would affect the accuracy of the need analysis and lead to an increase in the number of financial aid appeals. But, studies have shown that income data is surprisingly stable from one year to the next, except in certain occupations (e.g., self-employed individuals and small business owners). So, subsequent data analysis showed that PPY would lead to a net decline in administrative burden for college financial aid administrators, causing NASFAA to switch from opposing the idea to championing it. This, plus legislative changes enacted by Congress in 2008, paved the way for the U.S. Department of Education to switch to the use of prior-prior-year (PPY) income and tax data.

More Simplification Needed

Switching the FAFSA to PPY is a big step toward simplifying the FAFSA. But more simplification is needed.

President Obama has called for eliminating about one-quarter of the questions on the FAFSA. But more simplification is necessary.

About 2 million low-income students don’t file the FAFSA each year, even though they would have qualified for a Federal Pell Grant. About 1.3 million of them would have qualified for the maximum Federal Pell Grant. Many of these students said that the forms were too much work or thought that they were ineligible for grants. Some of these students are enrolled at low-cost colleges and may believe that they can work their way through college. But, students who work full-time are half as likely to graduate as students who work 12 hours or less per week. Simplifying the financial aid application process might encourage more students to apply for aid and work fewer hours, increasing graduation rates.

The federal student aid programs are the only means-tested federal benefit programs that require submission of a complicated 108-question form. Most other federal benefit programs involve a simple comparison of family adjusted gross income (AGI) with a percentage of the poverty line, typically 130% or 185% of the poverty line. Examples include Supplemental Security Income (SSI), Free and Reduced Price School Lunch, Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF) and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). Even education tax benefits, like the American Opportunity Tax Credit, Lifetime Learning Tax Credit and Student Loan Interest Deduction, base eligibility on the taxpayer’s income, disregarding assets and other factors. The complexity of the FAFSA shifts the focus from helping low-income students to afford college to preventing high-income students from looking poor.

Could You Be Saving More?
Subscribe to Edvisors' Student LIFE Newsletter to receive up-to-date financial aid information and advice, explore scholarship opportunities, loan repayment options, and learn expert strategies on how to plan and pay for college.
Newsletter Form
By clicking "Subscribe" I have read and agree to the Edvisors' Terms of Use and Privacy Policy. We strongly encourage you to read our Privacy Policy to understand how we use and share your information.
Thank you for subscribing to our newsletter.
We care about your privacy

This website uses cookies to offer you the most relevant marketing and targeted advertisements.  These cookies can collect information to personalize your experience and in some states are considered a sale of your personal information. You may exercise your right to opt out by clicking on deny cookies.  If you opt out, we or our partners will not be able to provide you with personalized ads and we will not provide your personal information to any third parties.   Please accept cookies for the optimal experience.  You can withdraw or modify your consent for non-essential cookies at any time by visiting Cookie Preference page.

Ask the Edvisor
Blog
Contact Us
Edvisors in the News
Link to Us
Newsletter
Partners
Press
Student Aid FAQ
Testimonials
Tools and Calculators
About Edvisors
Video Resources
Financial Terms Glossary
Accessibility Statement
Sitemap
Disclaimer
Notice of Collection
Interest-Based Ads
Cookie Settings
Privacy
Terms of Use
Your Opt-out Rights
Your Privacy Choices Privacy Options

Better Business Bureau logo

Edvisors provides expert advice on planning and paying for college. On Edvisors.com easily compare student loan lenders, learn how to apply for financial aid, and discover scholarships. Learn about federal and private student loans for students and parents, how and when to apply to college, and more!

Edvisors (“Edvisors Network, Inc.”) provides independent advertising-supported platforms for consumers to search compare and apply for private student loans. Loan offers from participating lenders that appear on our websites are not affiliated with any college and/or universities, and there are no colleges and/or universities which endorse Edvisors’ products or services. Lender search results do not constitute an official college preferred lender list. Edvisors receives compensation from lenders that appear on this site. This compensation may impact the placement of where lenders appear on this site, for example, the order in which the lenders appear when included in a list. Not all lenders participate in our sites and lenders that do participate may not offer loans to every school.

Edvisors is not a lender and makes no representations or warranties about your eligibility for a particular loan or financial aid. Lenders are solely responsible for any and all credit decisions, loan approval and rates, terms and other costs of the loan offered and may vary based upon the lender you select. Please check with your school or lender directly for information related to your personal eligibility.

Edvisors has endeavored to provide accurate information. However, the results provided by lenders are for illustrative purposes only and accuracy is not guaranteed, as such, Edvisors assumes no responsibility for errors or omission in the information provided.

Copyright © 1998-2023 by Edvisors Network, Inc. All rights reserved.

All other trademarks and service marks displayed on Edvisors Network, Inc. websites are the property of their respective owners.

Edvisors Network, Inc. 350 S. Rampart Blvd, Suite 200, Las Vegas, NV 89145

Copyright © 2023 by Edvisors.com. All rights reserved.

×
You Got In - Now How Do You Pay for It?

Get the money you need from leading lenders

1 Pick Your College
2 View Your Options
3 Click to Apply
Exit Modal

PrivateStudentLoans.com recommends you consider all financial aid alternatives including grants, scholarships and federal loans (Federal Stafford, Federal Parent PLUS, Federal Grad PLUS) prior to applying for private student loans.