Important Changes to Student Financial Aid Programs
The Free Application for Federal Student Aid (FAFSA) is changing beginning with the 2017-2018 award year. Most importantly, the 2017-2018 FAFSA will be available three months earlier than in past years. This means students will be able to complete their 2017-2018 FAFSA on October 1, 2016 for the 2017-2018 award year. This is a change from the traditional January 1st begin date.
Another big change for students is that they will no longer have to use estimated tax information in order to complete their FAFSA. Starting with the 2017-2018 FAFSA, income information will be based on what is referred to as “prior-prior” year income. For students and their families this means they will be using income from 2015 instead of using 2016 estimated income and having to return to the FAFSA to update their information when taxes are filed.
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.