Four things college families should know about the simplified FAFSA

Higher education expenses are a major concern for many families with college-bound kids. While student financial aid programs exist, trying to complete their lengthy, complex applications often leave parents and students feeling discouraged and confused. However, recent updates to the Free Application for Federal Student Aid (FAFSA) aim to streamline the process while making college more affordable.

The FAFSA Simplification Act of 2021 link opens in a new window phased in multiple changes over the past three years, with final updates to take effect in the 2024–25 award year. Here are a few things you should know before completing the newest FAFSA form, available December 2023.

1. Expanded FSA ID requirements. Students and parents are not permitted to submit information on someone else’s behalf. For example, a parent is prohibited from entering information about their spouse. Anyone providing information on the FAFSA must do so under their section of the form. This will require individuals to obtain their own FSA ID. A Social Security number and a phone number or email address are typically needed to create a FSA ID link opens in a new window.

   However, the U.S. Department of Education is expected to release instructions soon for parents who need Social Security numbers to aid in verifying their identity. Families should contact their school’s financial aid department or the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243 for more information.
   
   

2. Additional consent and approvals are mandatory. Prior FAFSA forms allowed self-reported tax data but encouraged applicants to use the IRS Data Retrieval Tool (DRT) to automatically transfer federal tax data to fill in certain sections of the FAFSA form. The updated FAFSA does not allow for self-reported data. Plus, direct data sharing with the IRS will replace DRT.

   Each person required to supply financial data must consent to and approve federal tax information being transferred directly from the IRS to the FAFSA form. While students may still technically submit the form without this authorization, student aid eligibility will not be calculated.
   
   

3. Dependency status modifications. Prior to the 2024–25 award year, separated students were instructed to mark “married” on the FAFSA form. The new application no longer considers separated students married. Unless the student is considered independent by another FAFSA criterion, they will revert to dependent student status. This has implications for student and parent financial aid eligibility.
   
   

4. Revised student eligibility methodology. After the FAFSA has been processed, students will be assigned a numerical Student Aid Index (SAI) instead of an Expected Family Contribution (EFC). The SAI, like the soon-retired EFC, will still help schools and families determine students’ eligibility for federal student aid programs, institutional scholarships, and college grants.

   However, this new name comes with a revised way of measuring the ability to pay for college. For example:

   • The number of family members in college is no longer considered when determining financial need.
   • A need-analysis formula (cost of attendance – SAI = financial need) allows for a negative figure, an SAI of -1,500 instead of zero.
   • Child support received will be considered in total assets instead of untaxed income.
   • Elimination of alternate EFCs (now SAIs) for shorter enrollment periods, e.g., summer school.
   • Updates to federal Pell Grant eligibility that factor in family size and federal poverty levels.
   • Replacement of the Simplified Needs Test (SNT) and Auto-Zero calculation for grant eligibility with similar calculations that align with the modified needs formula.

These and other changes might increase or decrease a student’s eligibility for federal student aid programs.

Understanding the new FAFSA changes could ensure a seamless application process and make college more affordable. Complete your FAFSA for the upcoming school year by visiting studentaid.gov link opens in a new window today!

Note: New FAFSAs are usually available each October for the upcoming school year. However, due to the U.S. Department of Education’s launch delays, the 2024–25 FAFSA form will be available to families in December 2023.