The process of simplifying the Free Application for Federal Student Aid (FAFSA) form began with the FAFSA Simplification Act, and changes started being phased into the form over the past couple of years. The required form helps applicants gain access to tens of thousands of dollars in loans, grants, federal work-study, and scholarships.
The overall goal has been to eliminate frustration and provide students and families with a faster, easier application process with accurate results. Last year’s major change was that users were asked to select their role in the application process – parent, student, or preparer. The number of questions on the form was also reduced – and the myStudentAid mobile app was also retired last year because it was used by so few applicants. The new online version of the application is responsive to any device being used by the applicant.
As U.S. Department of Education (ED) Undersecretary James Kvaal stated, “The new FAFSA is going to be streamlined, simplified, faster, and it’s going to be easier than ever for students to get the help that they need to pay for college.” Officials have said the form will range from 18 questions to approximately 50 questions for students and families with more complex financial situations. The estimated time to complete the form ranges from 10 minutes to an hour.1
What’s Changing This Year?
The first major change is that the form was not available on October 1 for next academic year, but will instead be available on December 31, 2023. This makes the timeframe for completing the FAFSA shorter and may make it tight for institutions that have a January deadline.
Here are other key changes.
Who Files and How
- Both students and parents will be required to create a Student Aid Account in order to get an FSA ID (including a username and password) before they can complete the form.
- The Social Security Administration will verify FSA IDs before accessing tax information, adding approximately three days to the process.
- Students and parents will complete their own sections by logging in to the FAFSA separately.
- In the case of divorced or separated parents, the parent providing more financial support to a student in the last calendar year is the one who will complete the FAFSA.
Calculation Changes – and the Impact
- Calculations for student aid are changing to be called the Student Aid Index (SAI) rather than the Expected Family Contribution (EFC) and different factors are being considered.
- While the EFC calculation considered multiple family members in college at one time, the SAI doesn’t give an advantage in that situation, since this factor is removed from the calculation.
- Families with an adjusted gross income of $60,000 that own farms or small businesses with fewer than 100 employees will have to include their farm or business as an financial asset that can be used to pay for college. 2
- Lower-income families will be eligible for more aid under the new formulas, which protect a family’s basic daily living expenses from being included in the formula. Allowances will increase by 20% for parents, 35% for most students, and up to 60% for students who are single parents.3
- Pell Grants may be available to approximately 2.1 million more students than under the old formula 4 and with the new formula, it will be easier for people to know they’re eligible for the grant.
- Incarcerated students and those who have been convicted of drug-related offenses are eligible for financial aid, including Pell Grants.
- A negative contribution score of as low as minus $1,500 is possible with the new SAI index, helping to indicate the neediest students – even though federal financial aid can’t exceed the cost of attendance.
You’ll also notice that the FAFSA no longer asks questions about gender – however, those completing the form are still asked to provide their gender, race, and ethnicity in order to compile statistics about who’s applying for financial aid and who is not. This Dear Colleague letter can be helpful as you take a closer look at these changes to their FAFSA and their potential impact on students and families.
Students who applied under the early decision process may be unable to use the new FAFSA form for their financial aid application, but those applying for college with deadlines in January and later can take advantage of the new, simplified form. The process of transferring student data from the new application to schools for use in creating their financial aid offers is set to begin in January within weeks of the FAFSA’s launch, according to ED officials.5