A couple of years ago, Congress passed the FAFSA Simplification Act (FSA) with an effective date of July 1, 2023. That date is now upon us, so let’s take a look at the changes in FAFSA we can expect to see.
For starters, as the act’s name implies, it’s just going to be easier to fill out. The application itself will be reduced from over 100 questions to around 40. Hopefully, that change alone can significantly increase the number of students who complete the FAFSA.
Many changes probably affect a small number of applicants but are nonetheless important. Students will now find more access to complete the FAFSA as independent students. Those who are orphaned, homeless, or in other special circumstances will find it simpler to complete the FAFSA without parental involvement. This doesn’t affect many people, but the process was very burdensome for those who it did–a group that needed financial aid as much as anyone.
One of the biggest changes FAFSA will make is to the Expected Family Contribution or EFC. This was the amount of money the FAFSA determined families were expected to pay out of pocket for their child’s educational expenses before financial aid kicked in. The EFC is being replaced by the Student Aid Index or SAI. The SAI still provides a number that indicates a family’s share of the financial burden it takes to send their children to college, but the components used to derive that number have been modified. Simply put, these modifications within the SAI should have the effect of providing more aid to more students. One benefit that stood out to me here is that “money paid on a student’s behalf” no longer counts as income in the SAI as it did in the EFC. This would include money paid by a grandparent, for example, for the student to continue their education.
Maybe the changes aren’t all great though. One negative I see is the way the redesigned FAFSA treats families with multiple students in college. Previously, when a second child entered college the EFC was essentially divided by two (or by however many children were in college). That provision is being eliminated which will negatively impact some families and essentially remove a discount those who had their children close together used to receive.
Overall though, these changes are good. FAFSA projects about 15% more students will receive Pell Grants than they did previously, other students will receive more aid than before, more students still (like those who are incarcerated) will be eligible for aid to begin with, and the whole application process is just more transparent and simpler for all applicants.
Lastly, there is one more significant change that hopefully is only temporary. For the past several years, FAFSA has opened on October 1st to apply for aid for the following school year. FAFSA has signaled they are running behind on implementing all these changes. Thus, it is very likely FAFSA will open a little later than usual.
