What You Need to Know About FAFSA Simplification

For years, the U.S. Department of Education has taken strides to simplify the Free Application for Federal Student Aid, more commonly referred to as the FAFSA. In the next few years, however, it will undergo some of the most impactful changes yet.

FAFSA Simplification Act

The Consolidated Appropriations Act, which contained the FAFSA Simplification Act, was passed by Congress in December 2020. This Act called for streamlining and simplification measures of the FAFSA that will extend through the 2024 – 2025 award year.

FAFSA Changes 2023 - 24

FAFSA simplification began with last year’s FAFSA. Students saw a modified form and more leniency in how aid is distributed in the current filing year for the 2023-2024 FAFSA.

Cost of Attendance (COA)

For the 2023 – 24 award year, colleges were required to include more details about the cost of attendance for their institution. In the past, colleges could be very general, but the new changes call for more clarification. According to the Department of Education, students will see COA broken down as such: • “Books, course materials, supplies, and equipment” will receive its own category and is no longer permitted to be lumped in with tuition and fees. • “Transportation” expenses will be defined as transportation between home and campus, residences, and a student’s workplace. • “Room and board” will now be referred to as “Food and Housing” and will be grouped with “Living Expenses.” • “Living Expenses” now breaks down food and housing into specific scenarios, such as living on campus vs off campus and having a meal plan vs grocery shopping and cooking. If the college you’re interested in does not break down cost like the above, call the Admissions or Financial Aid offices. They can provide a price breakdown for you.

Independent Student on FAFSA

Students living in special circumstances will find that it’s easier to identify as an independent student when they file the FAFSA. Simplified questions will enable them to declare their independent status. This revision is only available to students who are considered: • Homeless • Orphans • Former foster youth • Other unusual circumstances During the current award year (2023-2024 FAFSA), students will still have to request a determination of independence before their FAFSA can be processed. This can be done through the school to which they are applying. Now their answers will be carried over to future forms. Independent students can find which forms of proof will be required to gain their independent status on the FAFSA here.

Pell Grant Eligibility

More students will be able to qualify for the Pell Grant under FAFSA simplification rules, extending to 15% more students. Incarcerated students will regain the ability to qualify for the Pell Grant. Students who have experienced school closures as well as falsified or fraudulent certifications will have access to the Pell Grant, despite maxing out lifetime eligibility at former institutions.

Student Loan Limits

In the past, federal loan borrowers could not receive subsidized loans of up to 150% of the program length during their lifetime. The requirements have caused first-time borrowers who have met or exceeded the 150% limit to lose the interest subsidy on their Direct Subsidized Loans. This rule has been repealed.

Removal and Addition of Questions

Finally, enrollment in Selective Service Registration has been removed as well as questions about prior drug convictions. Questions about the applicant’s sex, race, and ethnicity were voluntary in the 2023 – 24 award year but will be will be mandatory during the 2024 – 25 award year.

FAFSA Changes 2024 - 25

While the above changes went into effect last year, there are more FAFSA simplification measures that will go into effect this year – during the 2024 – 25 award year:

Expected Family Contribution (EFC) to Become Student Aid Index (SAI)

This year’s FAFSA will replace the EFC with the SAI – Student Aid Index. The EFC has long been the figure that has identified how much a student – or family – can afford to pay for school once they have filed the FAFSA. The acronym isn’t the only thing getting a facelift. The SAI will be determined by a different methodology. According to studentaid.gov, “the new need analysis formula removes the number of family members in college from the calculation, allows a minimum SAI of -$1,500, and implements separate eligibility determination criteria for Federal Pell Grants.”

Extending Pell Grant Eligibility

Under the FAFSA Simplification Act, more students will qualify for the Pell Grant during the 2024 – 25 award year. Pell Grant eligibility will now be linked to family size and the federal poverty level.

Further Help for Independent Students

Independent students on the FAFSA will be able to submit their form under a provisional independent status. This will allow them to receive an SAI with an estimate of their federal financial aid eligibility, with final determination made by the school.

Streamlining the FAFSA Form

Beginning this award year, the FAFSA will be available in the 11 most common languages in the United States. Additionally, the form will use data directly from the IRS to determine Pell Grant eligibility and the SAI.

Complete the FAFSA to Qualify for Financial Aid

With the above implementations, it will be easier than ever to complete the FAFSA. Any student that wishes to qualify for financial aid must complete this form. Additionally, any students that hopes to remain eligible for aid must renew the FAFSA each year. Failure to do so will result in a loss of financial aid from federal and state governments as well as the college. If you require help filing out the FAFSA, talk to your school counselor, a financial aid administrator, or contact the Federal Student Aid Information Center (FSAIC).