I hadn’t seen this confirmed her yet, so thought I would make a post.
Profile joins FAFSA in making this change, which was announced several months ago for federal aid. 2015 tax information will be used for both academic year 2016-2017 and 2017-2018.
Doin’ my happy dance!! Oh, yeah, I know this doesn’t help some people, but it helps us. Woot!
So will colleges no longer take into account changes from the year 2015 to 2016, such a change to a lower paying job
as an unusual circumstance?
You could ask.
Yes, colleges will still take special circumstances into account, based on their own policies. You’d need to do a Professional Judgment review request, and the timing would vary … I don’t expect colleges will entertain such requests early … they already wait until close to the start of the school year, because the parent may get a new job in that time frame.
At a recent conference, I did hear at least one financial aid director say she would not do adjustments based on loss of income when the move is made. She said she does not have adequate staff to do so. I think most schools will look at the request.
Thanks kelsmom!
So, they will use my 2015 income for the school years 2016/2017 and 2017/2018. For D’s senior year, what income return will they use? Can I assume the one from 2016? Is there any benefit to increasing expenses in 2015 (I can pay ortho in full in December instead of monthly payments over the next 12 months) or any benefit to increasing allotments to a 529 or 401K before the end of this year?
Does this mean that a new CSS profile will only be required every other year for students already in college? Hard to believe Collegeboard would willingly part with that income.
@NEPatsGirl, your pretax adjustments such as 401K will be added back in, so that will not make a difference. Increasing expenses such as paying higher medical expenses could help you, if it means you have high enough medical expenses to deduct more than the standard calculation.
No. It means that 2015 tax information will be used two years in a row.
I don’t know if deducting any/more medical expenses would help. Those are below the line deductions that do not effect AGI. Even some above the line deductions are added back (or at least must be reported). The total of itemized deductions must be reported on Profile, and they do make a difference in the amount of tax paid, which is also reported on Profile, so I guess it depends on what kind of formula each school uses, which most of us are not privy to.
So, my son is currently a frosh at a meets-full-need profile school. Won’t they still want to look at 2016 tax data when deciding on aid for 2017-2018? Their FA deadline isn’t until April so there is plenty of time and it would give them a more accurate, fair and updated picture than the prior-prior year.
Well, the current version of Profile asks for information on three years worth of finances, with the middle of those three years requiring the most detailed information. Through this financial aid season, that middle year has been the “prior year,” or the tax year preceding the academic year for which the aid will be used. But starting with academic year 2017-2018, the “prior-prior year” will be the tax year looked at in detail, meaning that the 2015 tax year will be used twice for this purpose. So while the 2017-2018 Profile may ask for 2016 financial information, my guess is that information (along with 2014 tax data) will only be used to give the FA offices a broader view of a family’s financial situation in cases where professional judgment might come into play.
Not everyone has the luxury of completing the financial aid forms in April for an academic period that starts four or five months later, and this change is being made to accommodate those who must provide the information much earlier (often using estimates only, and then aid offers frequently need to be revised). Part of the reasoning for the change is that more students who have greater financial need will be able to accurately recognize that they have options, and then make informed choices based on those options with less urgency.
Exactly. This won’t move up the timeline for those colleges that admit April 1, because they still won’t give an aid package until the offer of admission is made. But for the majority of students, admissions come sooner. This will allow families to apply for aid without having to scramble to get taxes done early. For the first year, it will be a repeat of tax years (2015 twice), then it will be a new tax year each year. The changeover year will be a bit messy, but it will all work out.
Do we know for sure CSS Profile for 2017-2018 will ask no income related questions about 2016?
The 2017-2018 Profile will use 2015 tax year information. But the profile will also ask you to estimate the 2016 income…always has asked for,this next year estimate. I doubt that will change.
But in this case will the “estimate” be more thoroughly checked? In previous years it probably did not matter that much.
I can’t imagine it will change. The estimate is…an estimate.
Although this estimate will be able to be completed with at least 9 months of income already earned.