ERIC WESTERVELT, HOST:
College loans rank just behind mortgages when it comes to the top debt that Americans face, which is why paying for college remains such a hot topic. Big changes are in the works for families applying for financial aid. Some families can learn how much aid they qualify for even before they apply to get into college. Anjuli Sastry reports from Los Angeles on one family working through the changes.
ANJULI SASTRY, BYLINE: Meet Santa Monica High School junior Isaac Horwitz-Hirsch. He's already beginning the process of applying for college financial aid.
ISAAC HORWITZ-HIRSCH: The financial aid part is really confusing.
SASTRY: Isaac's parents are Joshua Hirsch and Ruth Horwitz. They're also struggling to understand the recent changes to the Free Application for Federal Student Aid or FAFSA. The family earns a middle-class income, and they made certain financial decisions before they knew about the new earlier FAFSA deadline. Ruth worries those choices, like helping a relative buy a used car and paying for Isaac to go on an orchestra tour will affect how much aid her son gets when he applies to colleges.
RUTH HORWITZ: It's completely anxiety producing, and it makes me feel sorry for Isaac that we're not rich.
SASTRY: But the FAFSA changes can be positive for middle-class families like Isaac's who are applying for aid. Here's why - this year, students will find out how much money they'll get from schools a lot earlier. That's because the FAFSA can be submitted as early as October.
PATTY COLSTON: Students will know how much money they have to work with before they even apply to college in some cases.
SASTRY: Patty Colston works for the California Student Aid Commission. Her office determines how much aid students get if they go to a public university in California. Colston says finding out about aid early is a big deal for students. They'll be able to make more informed decisions about the colleges they attend.
COLSTON: Literally as soon as we get the FAFSA or the California DREAMer Act application and the GPA from the school, we can start making financial aid awards.
SASTRY: The government will now use the previous year's income to determine aid. This can take some explaining to families like Isaac's.
JEFF LEVY: And then I think we should just open it up for your questions, any questions.
SASTRY: So the family's meeting with educational consultant Jeff Levy.
LEVY: Let's get started.
HORWITZ: 2015 would be what we would count our income...
HORWITZ: ...For him.
LEVY: Correct. Whether...
SASTRY: They're talking about something called prior-prior-year income here. In the past, colleges looked at a family's prior-year financial information to give aid. Starting this year, colleges will consider the family's income two years before the student starts college, a student's sophomore year in high school.
LEVY: If you have any control over putting off income, since income is by far the biggest determinant, do that.
SASTRY: Also, waiting to buy a car or home can be good strategies since aid administrators consider larges expenditures, too. Isaac's father, Joshua, asks about some advice he got from his tax guy.
JOSHUA HIRSCH: Putting more money into retirement though would have a permanent effect.
SASTRY: Levy says this part is complicated.
LEVY: Retirement savings do not adversely affect the student's financial award.
SASTRY: After two hours of questions, confusion, answers and finally some clarity, the meeting wraps up. Afterward, Isaac's mom Ruth says she's relieved.
HORWITZ: I couldn't do this without somebody who was holding our hands.
SASTRY: And as for educational consultant Jeff Levy, he says families need to start thinking about financial aid much earlier than they do now.
LEVY: This year's juniors - it's too bad because they've been given very little notice that this is going to be their base year.
SASTRY: So Levy says a student's freshman year is the right time to start the conversation about income and expenditures so families can start planning for decisions they'll make in the sophomore year, the year colleges will use to determine aid. For NPR News, I'm Anjuli Sastry in Los Angeles.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.