3 Biggest Changes In The NEW FAFSA

1. The Student Pin Replacement. As of May 10, 2015, FAFSA has dropped the four-digit PIN for making an electronic signature to the students FAFSA. Now, a student must go on the FAFSA and arrange for a broader security arrangement. The student will be asked to keep this information private from every member of the family. They will be required to select from a populated field of questions and provide answers to two questions. Then, the student will be required to come up with their own questions and answers. The student will definitely want to write these down EXACTLY as prepared on your FAFSA.

While this serves as a greater security measure, it will become a challenge for many students if they don't keep record of their answers exactly as stated on the FAFSA. Before, you simply needed to know your four-digit pin, which could have been the last four digit of your social security number or anything as simple as your favorite year.

2. Older tax data will be accepted. The current FAFSA filing system requires students and parents to complete the federal form as soon as possible after Jan. 1 -- typically before they've filed the previous year's taxes, which aren't due until April. Families often have to estimate their income and other data and then update their information later.

A new policy, announced by President Barack Obama in September, aims to rework that fraught process.
The fresh timeline will take effect beginning with those who apply for financial aid for the 2017-2018 school year. 

Applicants and their families will be able to start the FAFSA in October 2016, using the same data they reported on their 2015 tax returns. The use of older data means families can start the process earlier and most won't have to rely on estimates. 

The aim is to reduce inaccuracies and the need for verification, give institutions more time to review documents and potentially allow them to mail award letters earlier in the application cycle. 

3. Asset protection will plunge. When parents report their financial information on the FAFSA, a portion of their assets -- certain savings and investment funds -- are not counted by the federal government toward the amount of money they are expected to contribute to their child's education. That can mean a higher federal financial aid award than their student would otherwise qualify for. However, that protected portion will plummet next year, continuing a downward trend.
The sheltered asset amount varies, depending on the age and marital status of the student's parents, among other factors. For the married parents of a dependent student, where the eldest parent is 48, that asset protection amount is $30,300 in 2015-2016. The next academic year will see their allowance nearly halved, to $18,700. That change could hit families in the pocketbook. 

This is worrying news for middle income families.

4 Schools will lose a data point. When students file the FAFSA, they can choose up to 10 colleges to get their financial details. In the past, when students sent their FAFSAs to multiple institutions, those schools could see the other colleges on the mailing list. Starting with the 2016-2017 application, universities will lose that insight.

That's likely good news for students. Some experts worried that universities used the list to make financial aid decisions. For example, a school may have interpreted a student's decision to list that institution first on the FAFSA as an indication the student would be more likely to attend and less likely to care about the financial aid package. School officials could have then used this as justification in awarding that smitten student fewer institutional dollars.