Changes are coming soon to the Free Application for Federal Student Aid, otherwise known as the FAFSA. If you’re a student or the parent of a student, here’s what you need to know.
What, Why, When?
The U.S. Department of Education has called the new FAFSA form “the most ambitious and significant redesign of the federal student aid application and delivery in decades.” The expected launch date for the updated FAFSA is December 2023, so that students planning for the 24-25 school year can take advantage of the changes. FAFSA forms for the upcoming school year can be submitted until June 30th, 2024.
Transition to Student Aid Index
Previously, a college financial aid office would use information provided on a student’s FAFSA to calculate their Expected Family Contribution. Depending on their Expected Family Contribution, or EFC, the financial aid office would determine how much financial aid the student was eligible to receive.
The updated FAFSA does away with Expected Family Contributions altogether. Instead, information collected in the FAFSA will be used to create a Student Aid Index (SAI) for each applicant. The Student Aid Index indicates available household income from the student and parents, as well as assets. Unlike the EFC, the new SAI allows for a below-zero minimum, which may entitle some students to more financial aid.
On the other hand, the Student Aid Index doesn’t consider how many siblings in a household are in college at the same time, which could affect families who were hoping for the “sibling discount” calculated in the former Expected Family Contribution model.
New Calculations for Cost of Attendance
When determining how much financial aid students are eligible to receive, colleges will first calculate their own cost of attendance. The cost of attendance includes not only tuition, fees and textbooks, but also housing, school supplies, estimated transportation and personal expenses.
The new FAFSA makes a few changes to how a school’s cost of attendance is calculated. There are more specifics around the costs of various food, housing and transportation situations, to more accurately reflect costs for students who live on or off campus, who do or don’t have a campus meal plan, and so on. While much of the work to calculate cost of attendance happens behind the scenes, students could notice a boost in their financial aid award if the FAFSA changes lead their school to calculate a higher cost of attendance.
Fewer Roadblocks, More Accessibility
One goal of the new FAFSA changes is to make the federal aid application process more accessible to more kinds of students and their parents or guardians. In line with this, the FAFSA will soon be available in 11 of the most commonly spoken languages in the US. Previously, the form was only provided in English and Spanish.
In addition, some roadblocks to aid have been removed. Previously, students were required to register for the Selective Service as part of their FAFSA process, and people with drug-related convictions were barred from applying. Both of these factors have now been removed from the aid application process and related questions won’t be included on the FAFSA.
Pell Grant Changes
Some revisions to the FAFSA relate specifically to the Pell Grant, which is a federal grant awarded to low-income undergraduate students who demonstrate significant financial need. Under the new FAFSA, more students are eligible to receive a Pell Grant; including students who previously received a grant but were unable to complete their studies, as well as incarcerated students. In addition, eligibility will be expanded to students who don’t qualify for the maximum Pell Grant award under the usual calculations, but still have a Student Aid Index which is lower than the maximum.
Less Asset Disclosure
At the moment, all FAFSA applicants must provide information about personal and family assets, such as property, trust funds and brokerage accounts. This information helps the federal government get a wider view on a student’s financial situation; but under the revised FAFSA, some students won’t need to disclose this kind of asset information. Students who will be exempt from asset disclosure include those with an income lower than the tax filing threshold; applicants with a Student Aid Index of $0 or under; and those who are already receiving a means-tested benefit such as food stamps. The asset disclosure change is expected to simplify the application process for students with more financial aid needs.
