Navigating financial aid can be confusing. Especially when it comes to the Free Application for Federal Student Aid (FAFSA). Thankfully, the FAFSA is undergoing some structural changes that will simplify the application process. At least that’s what the FAFSA Simplification Act promises. But what is the FAFSA Simplification Act? What FAFSA changes will be enacted in 2024? And who is affected by these changes?
Understanding the most recent FAFSA updates will empower you to maximize your eligibility for financial aid. That’s why we’ve created this comprehensive guide meant to answer all of your most pressing financial aid questions. You may also be interested in reviewing our articles, Understanding Need-Based vs Merit-Based Financial Aid and College Financial Planning – An Overview.
What is the FAFSA Simplification Act?
According to the Congressional Research Service report: “There have been several long-standing concerns that the length and complexity of the FAFSA, and the lack of transparency and predictability its use provides for students and their families, may discourage postsecondary educational access and attainment…The FAFSA Simplification Act (FSA; Title VII, Division FF of P.L. 116-260) makes significant changes to the underlying processes and methodologies for determining federal student aid eligibility.”
To start off, what is the FAFSA Simplification Act? The short answer is that it’s a recently-passed law dictating that certain changes be made to the FAFSA process.
According to the Congressional Research Service report: “There have been several long-standing concerns that the length and complexity of the FAFSA, and the lack of transparency and predictability its use provides for students and their families, may discourage postsecondary educational access and attainment…The FAFSA Simplification Act (FSA; Title VII, Division FF of P.L. 116-260) makes significant changes to the underlying processes and methodologies for determining federal student aid eligibility.”
FAFSA changes 2024
So what does all of this mean practically? What FAFSA changes are being made? And who will be most affected by these changes? Let’s take a look at 4 major FAFSA changes for 2024:
You can import your taxes directly.
In order to streamline the FAFSA process, “contributors” (students, parents and their spouses, legal guardians, and students’ spouses) will no longer need to manually input their financial information. They will also be asked fewer questions about their financial assets. Instead, they will need to make a StudentAid.gov account so that they can fill out a form giving their consent for the IRS to import their taxes directly. Contributors must fill out a consent form, even if they don’t have a Social Security Number (SSN), didn’t file taxes, or filed taxes outside of the U.S. If a contributor does not give their consent, students will not be eligible for federal student aid.
There are fewer FAFSA questions.
In the past, the FAFSA has had a reputation for being long, tedious, and a bit inaccessible. The new FAFSA will only have 36 questions — as opposed to the 108 questions it used to have! This means that there will be fewer obstacles to filling out the form. For more information on how to approach FAFSA questions, check out our article, Everything You Should Know About FAFSA.
Expected family contribution formula has been amended.
The Expected Family Contribution (EFC) has been replaced with a Student Aid Index (SAI). Once your SAI has been calculated, colleges will use this number to determine your financial aid package. In addition to a change of terms (EFC to SAI), the formula used to calculate you and your family’s financial capabilities has been updated so that it is more reflective of our current economy. It’s also worth noting that this new formula removes the number of family members in college from the calculation. Single-parent households will also qualify for more aid.
Federal Pell Grant eligibility has expanded.
One of the most notable changes in FAFSA is that Federal Pell Grant eligibility has expanded significantly. Incarcerated students in federal and state penal facilities, students with certain drug-related offenses, and students who failed to register for the Selective Service are now eligible for federal aid and Pell Grants.
Students with an adjusted gross income (AGI) below certain levels are now automatically eligible for a maximum Pell Grant. This is meant to make the financial aid process more predictable and transparent for low-income students. The maximum Federal Pell Grant is updated each year. Currently, the maximum grant is $7,395. Overall, the new FAFSA takes family size and federal poverty level more into account when determining Pell Grant eligibility.
According to an article on the Federal Student Aid website, 610,000 new students will be eligible for a Federal Pell Grant and 1.5 million students will qualify for a maximum Pell Grant this upcoming year.
Key takeaways and moving forward
In addition to streamlining the process, the new FAFSA formula, used to calculate financial need, uses a new methodology, one that takes family size, federal poverty level, and wealth (beyond just income) into greater account. Federal Pell Grant Eligibility has greatly expanded as well. Previously excluded populations — such as incarcerated students, students with certain drug-related offenses, and students who failed to register for the Selective Service — are now eligible for Pell Grants.
The new FAFSA aims to make higher education more accessible. That being said, attending college is still a huge financial decision. This is why knowing when to apply for scholarships and How to Write an Essay for Scholarships is so important. Comparing financial aid packages will also play a key role in Making Your Final College Decision.
If you have questions about financial aid or any other college-related topics, consider reaching out to one of our college counselors. In the meantime, check out some more of our articles, such as: What to Do Once You’ve Been Accepted to Your Dream College.
The FAFSA has been long criticized for being inaccessible. Now that the FAFSA Simplification Act has been passed, the newly-streamlined process promises to become more accessible, especially for low-income students.
In addition to streamlining the process, the new FAFSA formula, used to calculate financial need, uses a new methodology, one that takes family size, federal poverty level, and wealth (beyond just income) into greater account. Federal Pell Grant Eligibility has greatly expanded as well. Previously excluded populations — such as incarcerated students, students with certain drug-related offenses, and students who failed to register for the Selective Service — are now eligible for Pell Grants.
The new FAFSA aims to make higher education more accessible. That being said, attending college is still a huge financial decision. This is why knowing when to apply for scholarships and How to Write an Essay for Scholarships is so important. Comparing financial aid packages will also play a key role in Making Your Final College Decision.
If you have questions about financial aid or any other college-related topics, consider reaching out to one of our college counselors. In the meantime, check out some more of our articles, such as: What to Do Once You’ve Been Accepted to Your Dream College.
