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Attention College-Bound Students: Important FAFSA Changes

Maryline Michel Kulewicz and Tracy Sullivan of College 101 Admissions Consultants

FAFSA is the “Free Application for Federal Student Aid’’ form that determines the family/college student’s eligibility for federal or state need-based financial aid which includes grants, work-study, and/or student loans. The FAFSA Simplification Act passed in 2021 which simplified the FAFSA form. These changes will become the standard with the 2024-2025 FAFSA- which applies to students attending college in 2024-2025.  There are several important FAFSA changes that could significantly impact a student’s financial aid package, and a few are highlighted below.

FAFSA Opening Date:  The FAFSA typically is available on October 1st of each year for students who are expecting to enroll into college the following academic year.  However, due to the complexities of instituting the FAFSA changes, the 2024-2025 FAFSA will not be available until December 2023. This may impact the colleges’ ability to send out their financial aid packages in a timely manner.  

Fewer Questions:  The number of questions on the FAFSA form will decrease from 108 to 46.  Additionally, the form will better align with the questions asked on the federal tax returns. The hope is that the FAFSA will now be easier to submit. 

Expected Family Contribution (EFC) is being replaced with the term - Student Aid Index (SAI).  The EFC and the SAI is a calculation of the amount of need-based federal financial aid that a student might be eligible to receive. The term EFC led families to believe that the calculated amount is what they would be responsible to pay annually for their child’s education; however, the cost is often much higher. The new FAFSA terminology will be less misleading, but a family will still not know the final costs until they receive the financial aid package from the college.  

Multiple Children in College:  This is one of the most important changes.  In the past, FAFSA focused on a family’s cash flow, and it was assumed that if a family had 2 children in college the family would not have double the money to pay for college. The new FAFSA will ask for the number of children in the family’s household but will no longer provide any discount for multiple children in college.    

Separated or Divorced Parents:  In the prior FAFSA, financial aid was solely determined by the custodial parent’s income-which is the parent who the child lives with 50% or more of the time.  With the new FAFSA, the parent responsible for filling out the FAFSA will be the parent that provides the most financial support to the child - and not where the child resides.  

Grandparent 529:  Certain untaxed income, such as grandparent-owned 529 plans and/or cash gifts from relatives will no longer be reported on the FAFSA - so the gifts will not impact the student’s financial-aid eligibility.    

Income Protection Allowance:  Income protection allowance, which is basically the amount of income that is not counted when determining the student’s financial aid eligibility, will increase for parents by 20% and by 35% for the student.  

The Pell Grant: Federal Pell Grants are provided to the neediest of students. In the 2024-2025 year the Student Aid Index (SAI) calculation will be adjusted so that more students qualify for Pell Grants. In addition, incarcerated students will be eligible again.  

Financial Aid Appeals:  There are quite a few changes in this section, but one of the most significant is that a college can no longer implement a policy that denies all financial aid appeals. All appeals must be processed on a case-by-case  basis.   

Third Party Assistance:  The new FAFSA guidelines do not allow any third party to charge a fee to help complete the FAFSA. 

This is an especially important topic and we only touched upon 10 of the changes. There are many resources available to learn a better understanding of ALL the changes, such as in the Federal Student Aid website:     

Good luck and enjoy the journey! 

College 101 Admissions Consultants LLC. 

Website:  Email: [email protected]. Phone: (508) 380-3845.


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