At the end of 2020, Congress passed the FAFSA Simplification Act, which will change many aspects of the FAFSA starting with the 2023-2024 school year. That means that current high school sophomores will be the first class of incoming freshmen to utilize this new FAFSA.
As the title implies, the goal was to simplify the FAFSA. However, some changes may actually complicate the financial aid process for many families. Let’s break down what the biggest changes actually are and who they will impact:
The Good
The FAFSA itself will be much shorter.
Currently, the FAFSA can have up to 108 questions. It will be shortened to approximately 36 questions. This should make the FAFSA much less intimidating, especially for first-generation families!
Expected Family Contribution (EFC) will be replaced by the Student Aid Index (SAI).
Unfortunately, this change will not actually impact many families because in many ways the SAI is just the EFC in disguise. On the bright side, it may make the process a bit less confusing for families. People often incorrectly believe that the Expected Family Contribution is the maximum amount that a family would have to pay. Hopefully, the new name will help avoid that misunderstanding.
The rules surrounding financial aid appeals are changing.
As of the 2023-2024 school year, the following changes will be in place (along with many others):
Colleges can no longer have a blanket policy of denying all appeals
Special circumstances may include an unexpected amount of business, investment, and/or real estate losses
Documentation proving unemployement can be used to set income to zero during qualifying emergencies (such as COVID-19)
Hopefully, families will see more positive outcomes from their financial aid appeals after these changes are in place.
The Bad
When parents are divorced, the parent that provides the most financial support will need to complete the FAFSA.
Today, whichever parent the student lives with the majority of the year is responsible for completing the FAFSA. The non-custodial parent’s information is not taken into account at all if a college only uses federal methodology (meaning, they do not require the CSS Profile as well as the FAFSA). This will be a huge change that may potentially impact students whose non-custodial parent is financially well off but does not intend to fund the child’s college education.
The Ugly
If a family has more than one student in college at the same time, the family’s contribution will not be divided accordingly.
This is the change that will most likely negatively impact the largest number of Simply Admissions clients. Right now, a family’s EFC is split according to the number of family members in college at the same time. For example, let’s say a family’s EFC is $120,000 but they have three children all attending college at one time. Each sibling’s EFC will be lowered to $40,000 that year. If a college’s total cost of attendance is above $40,000 per year it potentially allows the student to be eligible for more financial aid. With the new FAFSA rules, the same family’s EFC (now SAI) will be $120,000 for each child. That can significantly lower the amount of financial aid the family receives total.
In the end, the new FAFSA will likely impact every family differently. Simply Admissions is happy to review your family’s specific situation and provide personalized advice. If you have students who will be attending college in the 2023-2024 school year please feel free to contact us.