Last updated: November 28, 2023
Huge transformations are on the horizon for the Free Application for Federal Student Aid (FAFSA) application for the upcoming 2024-2025 aid year.
The FAFSA Simplification Act, enacted by Congress in 2020, marks a substantial revamp of the processes and systems involved in granting federal student aid. This comprehensive update encompasses alterations to the FAFSA form, the need analysis dictating federal aid eligibility, shifts in terminology, and various policies and procedures affecting schools engaged in federal student aid programs.
Historically, the FAFSA has been available beginning October 1st each year. However, because of significant changes to the application and the rebuilding of the FAFSA processing system, the 2024-25 FAFSA will not be available until December 2023.
The FAFSA Simplification Act brings about several advantages, such as streamlining the application process and enhancing the overall user experience for FAFSA. It also extends eligibility for federal student aid and removes obstacles for specific student groups, including those who are homeless, unaccompanied youth, incarcerated students, English language learners, and individuals from low-income backgrounds.
The 2024-25 FAFSA does not look at which parent the student lived with (custodial parent) when determining the Parent of Record in cases where legal parents are neither married to each other not unmarried but living together.
The FAFSA will expand access to Pell Grants to more students overall based on family size and the federal poverty level (FPL). While the formula to determine Pell Grant eligibility stays the same (cost of attendance (COA) minus Student Aid Index (SAI) and other financial assistance equals eligibility for need-based financial aid), applicants who don't qualify for the maximum Pell Grant amount may still be able to secure this type of funding.
The U.S. Department of Education says this can be the case if a borrower's SAI is less than the maximum Pell Grant award for the award year.
Many families with several children in school at the same time will qualify for less aid overall. With the new SAI formula, middle and high-income families with multiple dependents in college will qualify for less aid for school.
Under the previous FAFSA calculations, the value of a small business with less than 100 employees was not reportable as an asset. Moving forward, however, it will be a reportable asset. Farm owners will now have to list their land and farming equipment as family assets for the purpose of determining financial aid moving forward.
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