This paper assesses the likely impact of proposed changes in the Office of Postsecondary Education's method of calculating parental base-year income on determining eligibility for student financial aid. In examining applicant data the study concludes that the change to use of prior, prior year (PPY) income is not a good proxy for the current prior year (PY) data. It notes that: (1) at the individual student/family level, PPY either over- or underestimates income for approximately 63 percent of all aid applicants; (2) at the institutional level, almost half the cases will require recalculation of need ; (3) at the state level, many states will be forced to collect PY income on a supplemental form; and (4) at the federal level, the over- or underestimates of income with PPY will create several serious consequences, among them redistribution of federal aid from more needy to less needy families. The report discusses each of these findings in detail. Three appendixes provide: comparative data on Title IV applicant total family income; comparative data on the number and percent of applicants with income changes; and show how the proposed changes would impact upon one public institution. (CH)