The Latest FAFSA Changes: How They Impact Your Financial Aid
Some things are inevitable, like filing taxes and changes to government processes, like the Free Application for Federal Student Aid, also known as FAFSA. But unlike filing taxes, these FAFSA changes should make things easier for most people.
We know the FAFSA application can seem daunting for students and their parents. It feels like you’re signing your life away on one form, right? But while it can be confusing, the good news is there are a lot of people and resources ready to help you. The federal government made some changes in the FAFSA Simplification Act (passed in 2021) to make the process easier, and those changes were rolled out in phases. The final phase implements changes for the 2024-25 award year.
The new FAFSA form will be available in December 2023, but the US Department of Education’s Office of Federal Student Aid recommends that students and parents create an FSA ID now so they’re ready when the form launches. Let’s take a look at some of the new financial aid changes so that you’re as prepared as possible when you start filling out your 2024-25 FAFSA form.
The FAFSA will now use the Student Aid Index (SAI) instead of the Expected Family Contribution (EFC).
Before you say, “Huh?”, let us explain. In years past, the FAFSA used the Expected Family Contribution (EFC) to help calculate the types of financial aid that a student might be eligible for. The term was confusing for many people, as they weren’t sure if the EFC meant how much they’d have to pay for college or the amount they would get in financial aid.
Since the EFC was neither of those things, the federal government is hoping the name change to Student Aid Index will make it more clear for applicants and their families. The SAI is simply a number that colleges and universities use to determine your family’s financial need in comparison to other applicants.
Another factor that could influence your SAI is parental income if your parents are separated or divorced. In the past, students reported the income of the parent they lived with the most. But now, you’ll need to report the income of the parent that provided you the most financial support.
How is the SAI calculated?
The SAI is calculated with need analysis formulas established by Congress using the information provided on your FAFSA form as well as tax information from the Internal Revenue Service (IRS).
Every contributor will need an FSA ID.
If someone is required to provide information for your FAFSA form, they’ll need their own FSA ID. This could include parents—biological or adoptive, their spouses, you as the student or your spouse if you have one. Each person will complete their own section of the FAFSA form. Also, each contributor will need to give their consent to transfer their IRS tax information directly into your FAFSA form.
If a contributor doesn’t provide their information, your FAFSA will still be submitted, but the SAI won’t be calculated and you won’t be considered for any financial aid. Make sure to communicate that with everyone who needs to provide information for your FAFSA form.
Note: if you’re unable to contact a parent due to circumstances like parental abandonment, estrangement or incarceration, talk to your financial aid administrator.
The application process will be more streamlined.
Here’s a more-than-likely welcome change: the overall process of applying for the FAFSA will be more streamlined. Now, students can add up to 20 colleges on their FAFSA form. Previously, they could only add 10, so this change should make it easier if you’re planning to apply to several schools and explore your options.
Filling out the form will also be more user-friendly. Before, there could be up to 108 questions you’d have to answer while applying. With the new FAFSA changes, you will now only see 46 questions—and it’s a dynamic form, so you may not even see all 46 of those if they don’t apply to your situation.
The way Pell Grants are calculated will change.
A Pell Grant is money you don’t have to pay back, except for certain circumstances—it’s awarded based on exceptional financial need to students who haven’t earned their first bachelor’s degree.
In the 2024-2025 award year, Pell Grants will be awarded based on the percentage of credit hours in which the student is enrolled, a calculation called enrollment intensity. So, if you qualify for a Pell Grant, you’ll get an annual award that’s divided between each award period based on enrollment intensity.
So, what’s not changing?
You might read through all these changes and think, “Is there anything that IS staying the same?”
Answer: Yes. A few things won’t change, like federal student loan limits and needing tax information from the prior-prior year. So, for the 2024-25 FAFSA, your 2022 tax information will be used to determine your eligibility. If your family has had an income reduction since then, you may request a special circumstance appeal from the financial aid office.
Something else that isn’t changing: the USF financial aid team will always be here to help if you have questions or concerns. Contact us today if you need help understanding any of these new FAFSA changes or have general questions about the financial aid process.
