What Do You Need To Know About FAFSA For 2023-2024?
There’s been a lot happening in the news lately, so you may have missed some important information regarding upcoming changes to the Free Application for Federal Student Aid (FAFSA). Namely, as part of the recently passed Consolidated Appropriations Act of 2021, the FAFSA Simplification Act did as its name suggests, simplifying the FAFSA by reducing the number of questions from 108 to 36, as well as codifying some important changes to Pell Grants and the creation of a Student Aid Index (SAI) to replace the Expected Family Contribution (EFC). These changes take effect in July 2023 for the 2023-24 school year, and although the new FAFSA won’t be available for completion until October 2022, it’s time to take a look at how those changes may affect you.
What’s Changing About FAFSA?
The first and simplest change to the FAFSA is a two-thirds reduction of questions applicants must complete, from 108 to 36. This particular change simplifies the FAFSA significantly, which is a positive change, and doesn’t take much explanation. Some other changes are more complex, however. Others we see as positive include:
- Replacing the EFC with the SAI. This is actually a return of sorts, as the EFC replaced the original SAI in 1992. At first glance, this may seem like it’s just a rebranding, but it includes some important changes. The biggest is reducing the minimum family contribution from $0 to negative-$1,500, which means other financial aid will no longer count against your family’s contribution in the SAI. The name change also more accurately reflects what it represents; it’s merely an index that sorts families by eligibility.
- Some families will automatically qualify for Pell Grants. Households with family incomes below either 175% or 225% (depending on family circumstances like size, single-versus-married parents and so on) will automatically qualify for maximum Pell Grant awards.
- Increases in who is eligible. The new FAFSA Simplification Act removes a 1994 restriction on incarcerated students receiving Pell Grants. This increase benefits the larger population, as studies show that prisoners who receive an education are less likely to return to a life of crime once they’re released. It also “resets” eligibility for students attending institutions that close during their time there, which could be a growing problem as colleges recover – or don’t – from the global pandemic recession.
- An increase to the maximum Pell Grant. Unlike other changes, this change occurs during the 2021-2022 school year and increases the maximum from $6,345 to $6,495, a roughly 2% increase that essentially accounts for inflation.
- Changes in how “cost of attendance” is defined. This includes many changes that have grown increasingly necessary in the wake of COVID-19, such as allowing all students (not just those enrolled half-time or more) to be reimbursed for computing expenses, splitting room-and-board expenses to more accurately account for how much is spent on each, an increase to housing allowances and refinement of how they’re calculated and much more.
- Streamlined untaxed income declarations. This removes certain untaxed income, such as child support received, workman’s compensation benefits, veteran’s benefits and others, from the calculation of family income.
- Increased income protection allowance (IPA). The IPA shelters income according to a basic living expense standard. Changes include an increase in the IPA amount for parents, dependent students, and independent students (in certain circumstances). Most importantly, there is no longer a decrease in IPA for households with multiple students in college.
Further Changes To The FAFSA
Although, there’s a lot to digest here, we’ve only touched on some of the biggest changes to the FAFSA under the Consolidated Appropriations Act. There will be other changes, for example, to how the FAFSA will treat families with multiple students, a rework of the Simplified Needs Test (now called Applicants Exempt From Asset Reporting) and other changes to the financial aid formula. Some parts of the FAFSA, like the asset protection allowance (APA), will remain unchanged.
To allow the Department of Education to fully implement these changes, the revised FAFSA won’t be available until October 2022. It’s important to note too that, with a new presidential administration, which means a new Secretary of Education, there could still be more changes.
In the meantime, we encourage you to read the following articles to learn more:
- Pandemic Relief Package Simplifies FAFSA
- FAFSA Is Being Simplified: Here’s What You Need To Know
- 5 Big FAFSA Changes Are Coming
Let Westface College Planning Help With The FAFSA
These external articles all make for a good introductory primer to the changes discussed in this blog post. At Westface College Planning, we’re eager to discuss these changes in finer detail and help you navigate the financial aid process from start to finish. Our blog page regularly features articles on the FAFSA, CSS Profile and other aspects of planning for college. We’d be happy to have you sign up for one of our Tackling the Runaway Costs of College workshops or webinars. Contact us or call us at 650-587-1559 for a complimentary college funding consultation.
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