9 Major FAFSA Changes You Should Know AboutJune 21, 2023
Completing the Free Application for Federal Student Aid (FAFSA) is essential to qualify for federal, state and institutional financial aid, including grants and federal student loans. But students and parents may notice significant changes to the FAFSA this year.
The FAFSA Simplification Act adjusted the FAFSA and how the information submitted is handled. It instituted those changes in a phased approach starting in 2021, and full implementation will occur in 2024-2025.
These are the FAFSA changes you should know about:
1. The FAFSA Won’t Be Available Until December 2023
Typically, the FAFSA application becomes available to students on October 1 for the next academic year. For example, high school seniors could complete the FAFSA starting on October 1, 2022, qualifying for financial aid for college in the fall of 2023.
But that will be very different this year. Due to the FAFSA changes underway, the updated form is delayed, and students and parents won’t be able to fill it out until December 2023.
This delay is temporary; the Department of Education said it plans to make the FAFSA for the 2025-2026 academic year FAFSA available on October 1, 2024.
2. It Has Fewer Questions
According to the National College Attainment Network, just 57% of high school graduates completed the FAFSA. Students who skip the FAFSA often state that the form needs to be simplified and less time-consuming.
With the new FAFSA rules, the number of questions on the FAFSA is reduced from 108 to just 36, streamlining the application process. This update will hopefully cause changes in FAFSA completion rates.
3. It Simplifies Some State Aid Applications
Some states require a separate state financial aid application in addition to the FAFSA. Completing both forms can be tedious and time-consuming — a common complaint among students and families.
With the FAFSA new rules, some families will be able to transfer their FAFSA information to state financial aid applications, speeding up the process. Participating states now include Iowa, Minnesota, Mississippi, New York, Pennsylvania, and Vermont, but more states may join in the future.
4. It No Longer Asks About Drug Convictions
Previously, students had to answer questions about drug convictions on the FAFSA, and past convictions made the students ineligible for federal financial aid.
However, the FAFSA Simplification Act changed that. FAFSA has now removed the questions about drug convictions, and past drug convictions no longer affect your eligibility for federal student aid.
5. It No Longer Registers Students for Selective Service Through the FAFSA
In the past, all males between 18 and 25 had to register for the Selective Service to qualify for federal financial aid. Many students registered by completing the FAFSA. But the new FAFSA changes removed the Selective Service questions from the form, and a student’s Selective Service registration status no longer affects their eligibility for federal aid.
6. The “Expected Family Contribution” is Now the Student Aid Index (SAI)
Typically, students would receive an “Expected Family Contribution” after submitting the FAFSA. Schools use The EFC index number to determine a student’s financial aid package. But due to its name, many families believed the EFC was how much they’d pay for college, leading to confusion.
The Student Aid Index (SAI) now replaces the EFC. It fulfills the same role as the EFC, and it’s what schools will use to determine your eligibility for different forms of aid.
7. It Increases the Income Protection Allowance
The FAFSA places more weight on a family’s income than their assets when determining the student’s eligibility for aid. But families are covered by the Income Protection Allowance (IPA), which is the income excluded from consideration; the IPA is how much money you need to cover essentials and it’s protected.
- It was increased by 20% for parents
- It increased by up to $2,400 (35%) for most students
- It increased by up to $6,500 (60%) for students that are single parents
8. It Expands Access to Pell Grants
The FAFSA Simplification Act also expanded access to Pell Grants, federal grants for low-income undergraduate students. Under the new rules, single parents can qualify for the Pell Grant if their adjusted gross income (AGI) is less than or equal to 225% of the federal poverty line. In comparison, non-parent students can qualify if their AGI is less than or equal to 175% of the poverty line.
9. It Allows Students and Parents to Make Corrections
When students completed the FAFSA, they couldn’t make changes after submitting it if they noticed a mistake. Instead, they had to contact their college’s financial aid office to request adjustments. If the errors caused delays, the student’s ability to qualify for federal aid could be affected.
Under the new FAFSA changes, students and parents can make corrections to the FAFSA after its initial submission date.
How the FAFSA Changes Will Affect You
The new FAFSA changes should positively impact borrowers. It will be quicker and easier to fill out, and it will expand income limits and eligibility for valuable forms of financial aid.
However, the changes require a significant amount of administrative work, so it will take some time before the Department of Education can launch the new form. That issue has resulted in the Department of Education pushing back the FAFSA for the 2024-2025 academic year until December 2023 instead of October 1.
That delay could hurt students; some states and schools have deadlines early in the year — and it’s difficult for states to change those deadlines — so there’s the risk of missing out on state financial aid. And there’s the risk of students forgetting about it and not filling it out.
If that happens, students may have to pursue other forms of financial aid, including independent scholarships and grants or private student loans.