FAFSA changes seek to simplify student aid

Jan. 22—A new version of the federal student aid application known as FAFSA debuts for the 2024-2025 school year. The changes are introducing a simpler, more direct way to learn about student aid eligibility.

Filling out FAFSA, or the Free Application For Federal Student Aid, is the first step in applying for financial aid for college, including grants and loans and work-study.

Becca Diskin, director of financial aid at Missouri Southern State University, encourages all students to fill out a FAFSA, especially in their first year of college so they have maximum aid opportunities.

Many states, including Missouri, also require the FAFSA to determine eligibility for state financial aid. It's also used by many universities to determine their aid to students.

The FAFSA sends a student's financial information to schools they express interest in attending. It previously only allowed students to send information to 10 schools, but the new application allows them to send applications to up to 20 schools. Each school that admits a student will send them a financial aid package. The amount of financial aid they get varies with each institution.

Recently, Congress passed both the FAFSA Simplification Act and the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act. The simplification act streamlined questions on the FAFSA to make it easier for students to qualify for federal aid, reducing it from more than 100 questions to fewer than half that. The FUTURE Act allows families to tie their IRS information into the FAFSA automatically, so that families don't have to input their tax returns themselves.

"Those two congressional laws allow for students to fill out the FAFSA more seamlessly because it's using that direct IRS information that is already out there on the federal site and loading that into the FAFSA automatically for families," Diskin said.

The FAFSA has a reputation for being a complicated document, Diskin said, adding that Congress is trying to remove the perspective that people can't afford to go to college anymore. Making the process of determining financial aid eligibility simpler removes barriers to a college education.

Diskin also said that since the pandemic, students' decisions about college have been changing, with some thinking college is too expensive or they don't make enough money to pay it. Her office is trying to dispel those thoughts and show how much money is out there for college.

"If it's shorter, and less cumbersome, then hopefully they're not afraid of doing it. When they see the results of the FAFSA, that they're eligible for Pell Grants or other funding, that helps make the decision easier so they can start thinking of what they want to study, where they want to apply.

Even though the process has been simplified, Diskin said advisors and students are still adjusting to changes.

"It'll be great when we get through this year, but this coming year is going to be a bit rocky," she added.

Terminology changes

In an effort to make the form easier to understand, there's some terminology changes.

For example, the Expected Family Contribution — the index number calculated by the federal government to determine federal financial aid eligibility — has been replaced by the Student Aid Index. Diskin said the new name better reflects how the index works.

This index is not a dollar amount the student has to provide, or contribute, but more of an indicator that measures a family's financial strength and ability to pay for college.

The formula for this index has changed, too. Before, the government looked at a variety of numbers, including how many members of the family are in college.

Now, the SAI is used to determine how much federal student aid a student is eligible to receive. A lower SAI means a student is eligible for less financial aid. The new SAI is also streamlined with a simpler calculation of Pell Grant eligibility. A Pell Grant is a needs-based financial aid program from the federal government that helps low-income students pay for college. The grant does not have to be repaid by the student, except in rare instances.

Pell Grant eligibility is now calculated by looking at the adjusted gross income of the family and the family size itself, based on an index from the U.S. Department of Labor.

"Before, we had to look at all these factors and it was hard to tell a family at the beginning what they qualify for," Diskin said.

Student Aid ID

One new aspect of the FAFSA that could be a hurdle is the creation of a Federal Student Aid ID, Diskin said. This has to be done first before filling out the FAFSA.

The ID uses a students's Social Security number, name and date of birth to electronically authenticate their identity. Students also now need to consent for that data from the IRS to be used before beginning the FAFSA.

In addition to the student creating a FSA ID, any contributor is required to have a FSA ID and consent for their information to be used as well.

The term "contributor" is new to the FAFSA, and refers to anyone providing information for the FAFSA, whether it be the student, the student's biological or adoptive parents, the student's spouse, or parent's spouse. The FAFSA online will help applicants determine who their contributors are. The FSA ID can take up to three days to process.

Diskin said these changes will make it easier for families who are already low income to qualify for maximum aid. Instead of answering 20 different questions about 20 different things, Pell Grant eligibility is based on fewer factors and student eligibility is automatically determined right away.

According to the U.S. Education Department, an estimated 610,000 new students will be eligible for a grant. The new FAFSA will also allow 1.5 million more students to receive the maximum Pell Grant award, which will bring the number of students who are eligible for the maximum award to over 5.2 million. The maximum federal Pell Grant award available last year was $7,395.

At MSSU, nearly half the population is Pell Grant eligible already, Diskin said; she anticipates an increase in eligibility going forward with these changes.

The state of Missouri recently announced an extension of time to the priority deadline for the FAFSA, from Feb. 1 to April 1. The state established a longer window of time since the FAFSA opening was delayed with these changes. The form usually opens in October, this year it was delayed until Jan. 1.

Anytime between now and April 1, students should be filling out their FAFSA for the 2024-2025 academic year, Diskin said. This includes either brand new students starting in fall or returning students renewing for next year.

Diskin said the FAFSA still takes applications after April 1, but some of the priority funding might not be available and state funding is cut off at that deadline.

"If you're not starting college until August, don't wait. Do it now," Diskin said.

The Associated Press contributed to this report.