529 Plans and Financial Aid
As we approach September, college counselors and financial advisors are preparing to advise their students and parents on the upcoming changes this coming year. Preparing for the 2017- 2018 financial aid season will be is especially difficult due to a change in the administration and system failures from last year. I have recently posted two detailed articles on the new changes with the Data Retrieval Tool (DRT) and a review of the President Trump’s budget proposal. Both of these will affect the financial aid landscape this year and in the future.
I am hoping this will reduce the amount of misinformation that occurs during these changing times. The other problem facing both professionals and families is that some of the items are not final. In addition to the normal complexity and stress, a level of uncertainty could make it more difficult. With this newsletter and periodic alerts, I hope to keep you up to date on these topics.
Here are the two articles and summary that will give more details on the major changes and help you when you are preparing for the 2017 – 2018 financial aid season.:
Article contains a chart listing the proposed budget changes and shows how significant reductions may affect student aid programs.
Article highlights the changes in the DRT process
Here is a quick list of items to be aware of before the year starts:
- FAFSA and Financial Aid Submission Process
– DRT will be available on October 1
– DRT will not display any transferred financial information on the FAFSA or SAR
- Financial Aid Award for 2018 -19 (Most are proposals at this time)
– Perkin loans eliminated
– Possible reduction in work study funding and other federal grant programs
– Possible elimination of subsidized student loans
– Possible reduction in college research grants
- Student Loan Repayment and Forgiveness
– Elimination of Public Service loan Forgiveness
– Simplification of Income Drive Repayment methods
– Move to one loan servicing company versus multiple loan servicers
– Federal loan forgiveness timeframe will be based on undergraduate versus graduate loans
I have submitted a series of questions to the Department of Education specifically regarding the changes to the DRT system. Once we have those answers, we will issue some additional recommendations on the FAFSA submission. We are hoping to issue that in mid September in anticipation of the October 1 FAFSA availability date.
Regarding the financial award and student loan changes, these are related to the president’s proposed budget. Once congress approves that budget, these changes will go into effect. I am anticipating many changes to the initial proposal. The concern that I have is the grandfather affect of some of these changes. This could make a very complex process even worse based on the timing of the student loans.
Overall, it appears that attaining a college education will be more expensive and complex. We will keep you updated as new changes occur.
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