A New Financial-Aid Timeline Could Reshape Admissions. Here’s How Colleges Are Preparing.

When the Obama administration announced that starting this fall, students would be able to file the famously complex Free Application for Federal Student Aid months earlier using older tax data, some predicted that the move could bring big changes to the admissions process.

It’s too soon to know if they were right: Students can’t start filing the “early Fafsa,” as some are calling it, until next month.

But many colleges have worked to get ahead of the new process. More than two-thirds of them plan to make significant changes in their enrollment procedures because of it, according to a survey by the education-technology company Cegment Inc. Others are taking a wait-and-see approach.

Letting students and their parents fill out the Fafsa using older financial information had been a popular policy recommendation for years. Under the old system, the Fafsa became available in January and relied on tax data from the previous year, so, for instance, a student planning to start college in the fall of 2016 filled out the Fafsa using tax information from 2015.

That timing was far from ideal. Students are encouraged to file the Fafsa as soon as possible, in part because some kinds of financial aid, including some states’ grant programs, are based on the principle of first come first served. But many families don’t file their taxes until closer to the April deadline for doing so. Families that had not completed their taxes could apply for aid using estimated information, which they would have to go back and correct later, adding a hurdle to an already cumbersome process.

Now that the Fafsa will ask for tax information from the “prior prior year” — two years back, instead of one — nearly all aid applicants should have the correct information available. And many more of them will be able to take advantage of the IRS data-retrieval tool, which lets families transfer their tax information into the financial-aid form. That should greatly ease the process for families, and improve the accuracy of the information they submit, too.

While student advocates had long pushed for the shift to prior-prior-year tax data, the administration’s announcement that the Fafsa would be available in October instead of January came as a surprise to most observers. That new timing will allow colleges to send out aid awards — which spell out the financial aid a student can receive for the coming year — at a point in the year when, in the past, students couldn’t even have applied for aid yet. Students, in other words, could have a full picture of what college would cost them even earlier than their advocates anticipated.

But there’s significant variation in how colleges are responding to the change, at least in this first year. Nathan Mueller, a principal with the consulting firm Hardwick Day, calls it a “stratified response": Some colleges — especially private institutions with rolling admissions — see responding to the early Fafsa as a strategic opportunity or necessity, he says. Others are waiting to see how this year goes, or don’t think the change will mean much for them.

Earlier Awards

As soon as the Fafsa changes were announced, Tom Willoughby started holding monthly meetings about them with high-level admissions and financial-aid staff members at the University of Denver, where he is vice chancellor for enrollment. “We wanted to really understand what the implications were,” he says, “for families and for us.”

Mr. Willoughby figured that at least some families would apply for aid earlier — and expect an earlier aid award from Denver, too. The group of half a dozen senior staff members discussed whether the university should change its admissions deadlines, set tuition earlier, shift aid policies, or communicate differently with families. They decided to push to get students earlier aid awards.

That’s just what student advocates hoped that colleges would do. On the traditional timeline, many students find out what they’ll pay after aid at a particular college only a few weeks before May 1, the deadline to decide where to enroll. That doesn’t give them long to make a thoughtful decision.

Colleges build their aid awards based on the cost of attendance, the full amount students face for tuition, fees, room, board, and other expenses before financial aid in a given year. In many cases, that number can’t be pinned down until the spring, when colleges set their tuition for the coming year. So colleges that want to send earlier aid awards must either move up the tuition-setting process or send out estimated awards.

In April, Mr. Willoughby proposed to the university’s board that it set tuition in September instead of January, and the board voted to do so.

So when Denver sends out early-action and early-decision admissions offers this December, they will be paired with final aid awards. That move will give applicants lots of time to consider the financial aspects of their college decision. Denver will do the same with the offers in its “early decision II” cycle, in February. Those earlier awards will help many of the university’s students: About 60 percent of the class usually comes in through early-admissions programs, Mr. Willoughby says. The university also plans to send aid awards with regular admissions decisions, which go out in March, when possible.

A Question of Flexibility

Susquehanna University, which is on rolling admissions, also plans to send earlier aid awards, says Madeleine Rhyneer, vice president for enrollment and marketing at the Pennsylvania institution. “If we have offered you admission,” she says, “we are going to send you a financial-aid package four or five days later.” Like Denver, it brings in a large portion of the class early in the admissions cycle, meaning that many admitted students will have a long time to mull over their aid awards.

And incoming students aren’t the only ones who will benefit. Susquehanna also plans to give returning students earlier aid awards, Ms. Rhyneer says, hopefully in March or April, before students take their finals and leave for the summer.

While Ms. Rhyneer thinks that the early Fafsa is a boon for families, she sees a potential drawback for colleges. A student who accepts admission, final aid offer in hand, in January could go months without making any kind of next step toward enrollment. That kind of lag time concerns admissions officials because it might make students more likely to melt, or not enroll as planned.

To fill in part of that long wait, Ms. Rhyneer worked with colleagues across the university to bump up two other parts of the process for students who’ve decided to enroll. They’ll now get dorm assignments earlier, and will be able to register sooner for their first-year seminars. Susquehanna will also move one or two of its preview days for admitted students earlier.

Admissions officers have other worries about that long wait. It gives students time to fall out of love with a college that turns out to be expensive. And it gives families more time to try to negotiate for additional financial aid.

But those are worries for colleges, not students, Ms. Rhyneer says. At Susquehanna, more than a quarter of students receive Pell Grants, and about a third are first-generation students: exactly the sorts of students the federal policy change was designed to help. Serving such students is important to Susquehanna, she says, and here was a way to help them.

Besides, Ms. Rhyneer says, a small, private college like Susquehanna has the flexibility to make changes quickly.

Not every college is in that position. At the University of California at Santa Barbara, “we are in the camp of not doing much of anything initially,” says Michael Miller, interim assistant vice chancellor for enrollment management and financial-aid director. “There’s a lot of unknowns,” he adds.

The new financial-aid timeline may be particularly confusing for students applying to the University of California, which does not accept admissions applications until November, Mr. Miller says. Prospective students, in other words, will be able to apply for financial aid before they can apply for admission, making their first point of contact a campus aid office. Even so, Mr. Miller likes the idea of getting aid information to students more quickly.

Unintended Consequences

While the shift to the early Fafsa is widely seen as an improvement for students, even those in favor of it worry about unintended consequences.

Experts agree that the changes are likely to make it harder for colleges to predict yield, the percentage of admitted students who enroll.

Phil Trout, a college counselor at Minnetonka High School, in Minnesota, worries that such uncertainty will push colleges to bring in even more students through their early-decision programs, which have binding admission. Such programs tend to attract more-affluent applicants, for whom financial aid won’t play a pivotal role in the college decision, raising concerns about equity. Besides, says Mr. Trout, president of the National Association for College Admission Counseling, many high-school students are simply not ready to make a decision that early in the year.

The National College Access Network has been monitoring another potential downside for students: Some colleges have responded to the new Fafsa timeline by moving up their suggested submission dates for the forms, often known as “priority deadlines.” The group fears that doing so could disadvantage low-income students if, for instance, later submission results in a less-advantageous aid package. Some colleges warn that it might, but there’s no standard policy regarding priority deadlines.

The network isn’t alone in that worry. Last month the Education Department — which has encouraged colleges to send out earlier aid awards — sent a letter to college presidents asking them, among other things, not to change their deadlines. “Early priority aid deadlines,” the letter says, “most negatively impact students from low-income backgrounds and first-generation students who often have the least amount of information and support.”

Not everyone agrees with that reasoning. Hardwick Day has suggested that colleges “institute additional priority deadlines,” Mr. Mueller says. What the network is probably worried about, he says, is colleges giving less aid to students who miss deadlines. That’s not something the firm advises. The better use of deadlines, Mr. Mueller says, is to provide “a nudge for students to submit the Fafsa.”

Arizona State University has moved its Fafsa priority date from March 1 to January 1, says Melissa Pizzo, dean of admission and financial-aid services. While the deadline has moved up, students will have a longer window between when the Fafsa opens and the deadline than they did in the past, Ms. Pizzo says. “We are giving them 30 additional days for that priority date,” she says.

And even though the deadline is earlier, students can continue to file the Fafsa after it passes. Those who miss the priority date will still be in the running for academic scholarships, and those who qualify for the university’s College Attainment Grant Program, which fills in the gap between other grants and the sticker price of tuition for Pell-eligible Arizona residents, will still get that money, Ms. Pizzo says.

The university plans to start sending aid awards quite a bit earlier than it did in the past — in December, rather than March. That, Ms. Pizzo says, will give students much more time to make a fully informed enrollment decision.

Whether or not that extra time will work in the university’s favor is something that ASU, like other institutions making similar moves, won’t find out for months.

Beckie Supiano writes about college affordability, the job market for new graduates, and professional schools, among other things. Follow her on Twitter @becksup, or drop her a line at beckie.supiano@chronicle.com.