The Free Application for Federal Student Aid, or FAFSA, is slimming down.
For the 2024-25 school year, FAFSA will be reduced to just 36 questions from 108, including detailed financial information, and it will be easier to import income data from tax records. Along with the pared down form, the Department of Education is changing its formulas to determine who will qualify for aid and how much they’ll receive. The changes fulfill legislation passed in 2020 aiming to make student aid easier to get.
The goal is to make the process easier, but the path there is riddled with complications. First, the new form will only be available in December, at least three months later than usual, which cuts the amount of time some applicants may have to complete their forms. Then, there are the new formulas to emphasize wealth instead of cash flow in determining what people receive. Some critics say this shift means less money for families with more than one child or who own a farm or small business.
“These changes, and others, will have profound effects on students’ eligibility for financial aid,” nonprofit thinktank Brookings said earlier this year in an analysis. “There will be winners and losers.”
The most important changes include:
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The biggest changes people will notice, include:
“Those state and institutional deadlines will have to get pushed back a little, have some flexibility,” said Bill Debaun, senior director of data and evaluation at the National College Access Network (NCAN), a nonprofit membership and advocacy association.
For example, if your EFC was $20,000 last year, the amount was divided by the number of students enrolled in college. So, if you have two children attending college, your EFC was $10,000 per student. In the future, your SAI will be $20,000 per student, which reduces the amount you might need to attend.
The amount of aid from schools that these students will be eligible for “could be reduced by thousands, and perhaps tens of thousands of dollars, relative to the current formula,” EconoFact, a publication that analyzes economic and social policies, said.
Brookings estimated that almost 900,000 students with one sibling in college will maintain eligibility for financial aid under the new formula, but those students stand to lose almost $3,000 each in institutional grant aid, totaling $2.5 billion. Another 157,000 will lose all eligibility, which could have provided up to $7,900 each in aid, totaling $1.2 billion, it said.
A family with a farm valued at $1 million would be expected to contribute more than $7,600 toward an education. Under the new rules, that same family would be responsible for more than $41,000, potentially making those students ineligible for some federal and state aid programs and more reliant on student loans.
Basics:How can I pay for school? Complete FAFSA. What FAFSA is, who's eligible and when to do it.
Yes.
IPA will increase by 20% for parents, up to about $2,400 (35%) for most students, and up to about $6,500 (60%) for students who are single parents.
State Higher Education Executive Officers, a national association that helps develop education policies, projects that 42.9% of students previously ineligible for a Pell Grant may become eligible under the new calculation. That's approximately 2.1 million more students than under the old formula, it said.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
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