What You Need to Know About FAFSA And The Upcoming Changes
The Free Application for Federal Student Aid (FAFSA) determines eligibility for most types of undergraduate financial aid, including grants, loans, and work-study opportunities. The program is undergoing significant changes this year that will affect both the process for filling out the form and different aspects of how financial support is calculated. These changes are all meant to simplify the process and make it easier to apply for financial aid, but it's still important for parents to be well-informed.
What is FAFSA?
The FAFSA is a free application form used by the federal government, as well as most states and colleges, to assess eligibility for their need-based aid programs. The form collects information on the family's income to evaluate how much support the student can receive, based on specific criteria. Filling out FAFSA is critical for unlocking most types of financial resources and making college affordable, so it's essential for the vast majority of families.
Changes Being Made to the FAFSA Process
Applying for financial aid has been more or less the same for decades. That's now changing due to the FAFSA Simplification Act, which passed in 2021 and will be implemented for the 2024-25 school year. As the law's name suggests, the goal is to make the process more streamlined and accessible, especially for low-income families. Here's a breakdown of some of the key changes happening:
Delayed Application Opening
The application window for FAFSA is opening in December 2023 instead of the usual October. This delay is expected to be temporary and only for this year, giving families more time to adjust to all the new changes. However, many forms of financial aid are distributed on a first-come, first-served basis, so it's better to apply as early as possible, even before the window officially opens.
Changes to Aid Calculation
FAFSA is introducing the Student Aid Index (SAI) to replace the previous tool, known as the Expected Family Contribution (EFC). This section of the form will now have a lot fewer questions to answer, from previously being over 100 to less than 50. The new process is also designed to gather a more accurate picture of how much each family can afford to pay, with the possibility of low-income students being assigned a negative SAI value that makes them eligible for more aid. Some of the other differences that will apply:
Students don't have to report untaxed income, such as money they received as a gift from their grandparents.
The new methodology no longer takes into consideration whether the family has multiple students in college at the same time.
Placing more emphasis on calculating the Cost of Attendance accurately, which includes books, living expenses, and transportation.
Removal of the so-called "roadblock" questions that used to be part of FAFSA's eligibility rules, like requiring financial aid applicants to register for Selective Service.
Measures for Identity Verification and Consent
The updated FAFSA process places a lot more emphasis on privacy, requiring each person contributing information for an application to create their own Federal Student Aid (FSA) ID, including parents and spouses. This ID is partly a legal signature and partly a security measure to protect personal information. Each contributor also has to give FAFSA explicit consent to access their tax information, one of the crucial steps for verifying the financial details provided on the form.
Expanding Eligibility for Pell Grants
FAFSA's new rules aim to increase access to Pell Grants, a type of need-based financial aid that doesn't need to be paid back. This is part of a broader goal to address the student loan crisis and help make college more affordable. The new criteria for Pell Grants will allow a wider percentage of applicants to qualify for these funds, as well as make low-income students automatically eligible for the highest award possible.
Steps for Preparing to Apply
Filling out FAFSA is now meant to be a shorter process, especially since a lot of the detailed financial information required is being taken directly from each contributor's IRS tax records. But this form is still a crucial step in the college application journey that requires a little bit of preparation. Some ways students and their parents can make it easier to apply for financial aid include:
Set up your FSA IDs. This is the username and password each person contributing information will need to log on to StudentAid.gov. Both the student and at least one parent will need to create one.
Gather all necessary documents, ranging from federal income tax returns to bank statements.
Make a list of all potential schools that should receive your FAFSA information. The updated digital form lets students list up to 20 schools that will be able to use their results to determine a financial aid package. Even if you haven't applied or been accepted yet, list any school you're considering.
Mark your calendar with all the relevant dates throughout the application process, including federal, state, and college-specific deadlines. Submit the FAFSA form as early as possible to maximize eligibility for different types of financial aid.
If you are interested in getting support for your teen on their college admissions journey, we're here to help! We offer comprehensive admissions consulting packages for high school juniors and seniors to help their applications shine. If you have any questions throughout the process, don't hesitate to reach out at sydney@smontgomeryconsulting.com!