Long-awaited changes to the Free Application for Federal Student Aid form aim to make completing the form easier, unlocking aid to pay for college. The simplification effort also expands eligibility for many types of student aid.
Changes include a much shorter form where the number of questions is based on your family’s financial situation.
The FAFSA Simplification Act was bundled into the Consolidated Appropriations Act of 2021, which included the second coronavirus relief bill. The changes to the FAFSA are effective as of July 1, 2023, for the 2023-2024 academic year and afterward.
Here’s what’s in store for the new FAFSA and other updates to financial aid:
1. The FAFSA will have fewer questions
There are currently 108 questions on the FAFSA.
On the new FAFSA form, the total number of questions you answer will depend on your financial situation, but the maximum will be 36. Some questions have multiple parts.
2. Two roadblock questions will be removed
Students no longer must register for the Selective Service in order to complete the FAFSA, and the question will be removed from the application.
Drug-related convictions alone will no longer disqualify applicants, and the question won’t be included on the FAFSA.
3. The application will be translated into more languages
The current FAFSA is in only English and Spanish. FAFSA simplification aims to make the application easier for more students and their parents who don’t speak those languages.
The new form will be available in at least 11 languages.
4. It will be clearer if you need to include assets
Currently, aid applicants have to include their own or their parents’ assets when applying for federal student aid to provide a full picture of their financial situation. Otherwise, applicants must answer a series of questions about taxable income to apply without consideration of assets (called the Simplified Needs Test).
The act exempts applicants from having to disclose assets if they meet any of the following requirements (tax information will be imported to the application directly from the IRS):
They’re a non-tax filer.
They qualify for an automatic zero or negative Student Aid Index (and subsequently are set to receive the maximum Pell Grant award).
They (for independent students) or their parents (for dependent students) have an adjusted gross income of less than $60,000 (and do not file a tax return with lettered schedules A-H or file a Schedule C with net business income over $10,000 loss or gain).
They received a means-tested benefit, such as the Supplemental Nutrition Assistance Program, or SNAP.
5. More factors added to cost of attendance
The amount of financial aid you're eligible for is calculated by subtracting your Expected Family Contribution (soon to be Student Aid Index) from the school’s cost of attendance.
The FAFSA simplification effort adjusts cost of attendance to include more factors and rules:
Colleges can no longer set the housing allowance to zero for students living at home with their parents.
Meal plans must assume students are receiving three meals a day.
Colleges must include the cost of obtaining a professional license, certification or other professional credential.
Private student loans are no longer included in the allowance for loan fees (however, private loans often don't charge fees as federal loans do).
6. Student Aid Index replaces the EFC
The Expected Family Contribution, or EFC, is getting a new name: Student Aid Index, or SAI.
The SAI, like the EFC, is used to calculate most financial aid (all except Pell Grants). Your need will be calculated as cost of attendance minus Student Aid Index and other financial assistance.
The makeover is meant to correct the assumption that the calculation equals the amount your family can contribute, as the name suggests. Most families pay more than the EFC amount after taking loans to fill aid gaps. In reality, the EFC (soon to be SAI) is an index number used by college financial aid offices to determine your need for aid.
The information you include on the FAFSA determines your SAI; it equals the sum of your parents’ available income, your income and your assets.
7. Receiving a Pell Grant award will get easier
Pell Grant eligibility will be simplified. Maximum annual grants, for example, will go to students — or, if dependent, their parent or parents — who fall below the income thresholds for tax filing. Maximum grants will also go to those with adjusted gross incomes below 225% (single) or 175% (married) of the poverty line.
The act also extends Pell Grant eligibility for students who previously received a Pell Grant if they were unable to complete their studies due to the closing of their school or if their loans were discharged under borrower defense to repayment. It also restores Pell Grant eligibility to incarcerated students.
8. Applicants may get more need-based aid
Applicants will see their Student Aid Index set to zero automatically if they’re eligible for the maximum federal Pell Grant. The new formula would also allow an SAI of less than zero (negative $1,500). Both changes will allow applicants to receive more need-based aid.