The FAFSA is Changing: Here’s What You Need to Know

Changes to the FAFSA are here, yet some have been delayed. Applerouth is here to help you navigate these changes.

If you have a high school student applying to college soon and plan to apply for financial aid (including merit awards at some schools) and you don’t already know about the FAFSA, you are about to need to know all about it.

Background on the FAFSA and the Changes

The FAFSA, the Free Application for Federal Student Aid, is a required part of the need-based financial aid application at every college that accepts federal student aid and, without it, students cannot access key college affordability programs like federal funding, grants, Direct Student loans, or the Parent Plus loan.

The FAFSA has been making headlines in recent years with its multi-year modifications and pandemic-related delays. The FAFSA Simplification Act, signed in December 2020, was designed to make the process easier for students and families applying for need-based aid. (Applerouth outlined a number of the reasons why the FAFSA is under modification when that law was first passed.)¹

With the FAFSA opening on October 1 and the changes having changed several times, the need for clear information has never been higher. College admissions professionals attending the recent NACAC Conference in Houston, Texas (including some from our own Applerouth team!), tuned into a presentation by Cameron Washington of the US Department of Education, outlining the changes to the FAFSA for the 2023-24 application season.

What Families Need to Know Now

If you are a student or parent of a student who will be enrolled in college next fall, what are the changes to the FAFSA that will impact your family?

• The application no longer includes questions regarding drug conviction and Selective Service registration.
• Demographic survey questions have been added but these questions are in no way related to aid allocation.
• Questions regarding experiencing homelessness or being at-risk for homelessness have been added.
• Colleges have expanded use of the professional judgment option for situations that may have occurred since the application was completed, such as a change in financial status due to job loss. Families should work with their college or university to seek this professional judgment, if appropriate.
• Colleges and universities will be required to update the language associated with the cost of attendance (COA) on their websites, so that it is more reflective of the actual expenses a family can be expected to incur.

Edward Conroy of Forbes recently warned that families with assets will receive less financial aid than in past years because of an update in the calculation of the Asset Protection Allowance (APA). Conroy explained “Middle-income families enjoy more advantages than students from families with more limited financial resources, but after years of rapidly increasing costs, still struggle to pay for college.”

The application opened on October 1 for my high school senior. What do I need to get started with the FAFSA?

“The FAFSA will only ask questions that are absolutely necessary,” said Washington in September 2022. Families should gather the following materials and aim to apply as soon as possible because financial aid at some schools is first come, first served and funding can run out:

• Tax returns for student and/or parents from the most recent return (e.g., 2021 returns for fall 2022 submission)
• Asset records for student and/or parents including bank statements and investments
• Government issued identification for students and parents, including Social Security and/or permanent resident registration numbers and driver's license numbers, if applicable
• Federal school codes for the schools you will be applying to

What other changes are on the horizon that will impact current students?

The multi-year implementation of the FAFSA changes will continue with the most notable modifications going into effect for students enrolled in college during 2024-25. Families of current juniors, seniors and students enrolled in their first two years of college should take note of the more notable upcoming changes:

• Expanded accessibility of FAFSA forms to 11 most common languages
• Replaced Expected Financial Contribution (EFC) with Student Aid Index (SAI) and change Pell Grant Eligibility formula
• Import Federal Tax Information (FTI) for FAFSA form (which will allow families to import their tax information from the previously submitted information to the IRS).

When is the FAFSA Due?

Each state and college sets their own application deadline, but a good rule of thumb is to apply for financial aid when the student is applying to college. For example, a student applying for a November 1 Early Decision deadline should also plan to apply for financial aid as soon as the FAFSA opens. And it is important to note that many private colleges require additional forms, like the CSS Profile.

¹ Congress recently extended the timeline by another year, so a number of the most significant changes will now not take effect until the 2024-25 award year. In other words, the changes will not hit the wallets of families of students enrolled in college until fall 2024, based upon the applications that will be received starting on October 1, 2023 for the 2023-24 award cycle.