Important Changes to Student Financial Aid Programs
FAFSA PROCESSING FOR AWARD YEAR 2017-2018
There has been a significant change to income and tax information that students should be aware of when they complete their 2017-2018 Free Application for Federal Student Aid (FAFSA). Previously, students have been required to provide their most recent tax year information on their FAFSA. For example, the 2015-2016 FAFSA required 2014 income data and the 2016-2017 required the use of 2015 income data. The 2017-2018 will also require 2015 income and tax information as we transition to a new federal methodology known as “prior-prior” year income (PPY). This is a one-time situation where two award years will use the same 2015 income and tax information when completing the FAFSA.
With the change to PPY income, income data needs to be accurate and consistent between both the 2016-2017 and 2017-2018 FAFSA applications. This includes (but is not limited to): federal tax return type, tax filing status, adjusted gross income, income tax paid, exemption numbers, tax exempt interest income, untaxed portions of pension and IRA distributions, education benefits, and other forms of untaxed income.
The change to PPY may result in conflicting information or discrepancies in income and tax data between the two FAFSA application award years. If this happens, a student’s 2017-2018 FAFSA application will be flagged by the U.S. Department of Education with a Code 399. The Office of Financial Aid is required by law to review these applications and compare 2015 income and tax related items for both award years to determine the accuracy of reported information.
We highly recommend that students use the IRS Data Retrieval Tool (IRS DRT) to transfer IRS data to their FAFSA applications when they meet the eligibility requirements to do so. This is the most effective way to prevent conflicting information.
The College's policy regarding Code 399 issues can be found on the Financial Aid Policies page of ACORN.
Federal Pell Grant Program - Duration of Eligibility
Once you have received a Pell Grant for 12 semesters (full-time), or the equivalent, you are no longer eligible for additional Pell Grants.
- You are eligible to receive a Pell Grant for up to 12 semesters or the equivalent. If you have exceeded the 12-semester maximum, you lose eligibility for additional Pell Grants. Equivalency is calculated by adding together the percentage of your Pell eligibility that you received each year to determine whether the total amount exceeds 600%.
- For example, if your maximum Pell Grant award amount for the 2011-2012 school year was $5,550, but you only receive $2,775 because you were only enrolled for one semester, you would have used 50% of your maximum award for that year. If in the following school year, you were enrolled only three-quarter time, you would have used 75% of your maximum award for that year. Together, you would have received 125% out of the total 600% lifetime limit.
- Learn more about the Pell Grant limit.
Federal Direct Student Loan Subsidies - New Borrowers
Effective July 1, 2013, the Direct Loan interest subsidy will be limited for new borrowers.
- The new limitation impacts only new borrowers -defined as a student with no outstanding Direct Loan balance as of 7-1-2013.
- The law restricts the period of time for which a new borrower may receive subsidized loans, in the aggregate, to 150 percent of the published length of the student's current educational program.
- Once a student reaches that limit, he or she can only borrow an unsubsidized loan, and interest begins to accrue on the student's outstanding subsidized loans.
- While new borrowers will not see the effect of the subsidy limit until a minimum of 150 percent of his or her published program length has elapsed, it is important to understand that academic progress will be tied to the cost of borrowing student loans.