Overview: The purpose of this activity is to assist students in determining their primary financial aid strategy—merit-based or need-based, based on the EFC (Estimated Family Contribution) as computed by their FAFSA. The FAFSA is the Free Application for Federal Student Aid that all students, despite their family’s income level, must complete before they may be considered for federal student aid, whether it be in the form of grants or federally-backed student loans. Most colleges will also require that you file the FAFSA before you are considered for need-based institutional grants and scholarships. Previously, the FAFSA filing period opened on January 1 during the year that students would be applying for financial aid. The base year for completing the FAFSA previously referred to the tax year prior to the year during which you were requesting financial aid. For example, under the old rules, if you were requesting financial aid for the 2017-18 school year, then the FAFSA filing period would begin on January 1, 2017 (prior to parents and students having filed their 2016 Federal Tax Returns) and the base year for tax and income purposes would be 2016. However, under the new rules, the FAFSA filing period opens on October 1 of the year prior to when you will be applying for financial aid and the base year for tax purposes is the current year.