Monday, March 12, 2012

2012-13 FAFSA Update

As it looks today, there is another change to the 2012-13 FAFSA, which takes effect beginning July 1. The FAFSA itself has remained relatively unscathed (the maximum amounts haven't changed, but the way it's figured has been). In a previous post, I mentioned that the new rules each year have an effect on FA similar to the way car designers have an effect on a car model. This year is no different.

The biggest change is how the FAFSA is to be entered and verification. There is an IRS data retrieval function that was added a couple years ago, and what this does is it allows the student to import information from the IRS into their FAFSA, so the information is correct. However, if you want the FA person to enter the information for you, this most likely won't happen. The Dept of Ed wants students to take control of their paperwork, so they want to have the student do this by themself. We are still working on how to work this out at our school (some schools have been doing this for years).

As far as verification, the Dept of Ed will no longer accept tax forms as proper verification materials. If a FAFSA is verified, then the student must request a tax transcript from the IRS, which takes a couple of weeks to come in. It was assumed that eventually the FAFSA would have to be done online, but the fact that a 1040 wouldn't be acceptable as a valid form of verification is a huge change.

It is unclear if the number of FAFSAs that have to be verified will increase or decrease. Errors due to incorrect tax information should be down, but errors due to everything else should be way up. We'll just have to see how this whole thing works out. Currently, there are more questions than answers.

3 comments:

  1. I was frustrated to recently learn that tax transcripts will a few weeks to come, even when requesting them online. My son is a junior in college and this is the first year that we have had to send the transcripts to his college. hhhhmmmm....M.M, http://how2winscholarships.com

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    1. In the past, the only need for tax transcripts was if the student was verified and didn't have a copy of the 1040 tax return. This is the first year that the Dept of Ed only allows tax transcripts, which is quite odd to a lot of us. It has been recommended that students request a federal form 4506T-EZ, which is slightly simplified from the full 4506-T (tax transcript request form). It says on the form that it takes 10 business days, but information I've received from Dept of Ed says it should be 5-10 days. A lot of this is still new, and we're all learning through experience. I'll have more updates as they come in.

      Here's a link to the pdf of the 4506T-EZ:
      http://www.irs.gov/pub/irs-pdf/f4506tez.pdf

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  2. Nice list dear. Thanks for sharing it dear.
    Financial Aid

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