FinTech for Business: Renewal FAFSA: Why It’s Easier and Why You Should Complete It Now

Just when you thought you were safe from the Free Application for Federal Student Aid, it’s back in the form of the renewal FAFSA.

The infamously long, detailed financial aid form isn’t only for high school seniors. Each year, college students and their parents need to fill out a renewal FAFSA to qualify for financial aid. But there are some notable, encouraging differences between the initial and the renewal FAFSA.

“It’s not as tedious as it was before,” says Denise Scalzo, director of financial aid at Manhattan College.

The 2016-17 renewal FAFSA became available Jan. 1. Here’s why it’s not as scary as it sounds — and why you’ll want to fill it out as soon as you can.

1. Some of your information will be pre-filled

When you log in to fafsa.gov with your Federal Student Aid ID, the system will recognize that you completed a FAFSA last year. Your name, contact information and other identifying information will be pre-filled on the renewal form, which saves applicants at least 10 minutes, Scalzo says.

It’s crucial to make sure the data imported is correct, though, says Jacquelynn Mol, assistant director of financial aid at Saint Mary’s University of Minnesota. Because it’s based on your situation from the previous year, it won’t record address or school changes, for example.

“The FAFSA includes an assumed logic that can sometimes add incorrect information for the current FAFSA year,” she says. Catching an error now means you won’t have to correct it later, which could delay your financial aid award.

2. You can estimate your family’s income if you haven’t done your taxes

You and your parents must enter up-to-date financial information so your school can determine how much aid to give you. The IRS Data Retrieval Tool makes it easy by letting you import income information from your most recent tax return to your FAFSA.

But the tool isn’t available until Feb. 7, and it can’t transfer your tax information to your FAFSA until two weeks after you file your return. You can — and should, in many cases — complete your FAFSA sooner. Some states and schools have deadlines as early as January or February.

If your family hasn’t done taxes by early February, you can estimate income using tax information from 2014. Then, log in and correct your FAFSA using the IRS Data Retrieval Tool after you file your 2015 taxes.

Nerd note: Starting with the 2017-18 school year, students will be able to file their FAFSA in October using tax information from two years prior. That means starting in October 2016, you can file your 2017-18 FAFSA with 2015 income tax data. That will make it possible to use the IRS Data Retrieval Tool early in the application process.

3. The earlier you file, the better your chances for financial aid

Just like the initial FAFSA, it’s ideal to file as close to Jan. 1 as possible. That’s because some types of financial aid are first-come, first-served, and they don’t carry over even if you received them last year.

“Self-help funds, like college work-study, run out fast,” Scalzo says.

Schools and states have their own financial aid deadlines, which are often earlier than the federal deadline of June 30, 2017. To make sure you get all the aid you’re eligible for, file as close to the date the FAFSA opens as possible.

Read more: When Is My FAFSA Deadline?

Don’t forget that the renewal FAFSA can help you get aid no matter your family’s income. Even if you think you won’t qualify for need-based aid like the Pell Grant, the FAFSA could help you get scholarships from private organizations or merit aid from your school.

“Even if a student is not eligible for federal or state grant funding, the FAFSA may be used for institutional aid,” says Mol, referring to funds that come directly from a college or university.

If you’ve forgotten how to fill out the FAFSA (or blocked it out; we don’t blame you), use NerdWallet’s free resources and tools to remind you.