Hey there, college-bound students and families! We have some exciting news to share with you today. Starting in the 2024-2025 academic year, the Free Application for Federal Student Aid (FAFSA) is getting a major makeover to make the process simpler and more user-friendly.
The FAFSA Simplification Act, which was passed recently, aims to streamline the financial aid application process and reduce the burden on students and families. Gone are the days of filling out lengthy forms and struggling to understand complex questions. With the new changes, you can expect a smoother experience from start to finish.
Because of the changes, the new FAFSA won’t open as usual on October 1st this year but will be delayed until December.
So, what exactly can you look forward to with the simplified FAFSA for 2024-2025? Here are eight key highlights:
- Fewer Questions: Say goodbye to the overwhelming number of questions. The new FAFSA will significantly reduce the number of questions from 108 to about 46. This means you can spend less time filling out forms and more time focusing on your college journey.
- New Terminology: A new “student aid index” will replace the current “expected family contribution” terminology. Think of the student aid index as a yardstick measuring a student’s financial aid eligibility, rather than how much a family will pay.
- Automatic Data Retrieval: The revamped FAFSA now uses a new IRS direct data exchange tool. This tool allows you to automatically transfer your tax information directly from the IRS database to the FAFSA form, reducing the chance of errors and speeding up the application process. (As a reminder, the 2024-2025 FAFSA will use income information from an applicant’s 2022 federal tax return.)
- Enhanced Eligibility Assessment: The changes to the FAFSA will introduce a different measure of your ability to pay for college. This means that your eligibility for financial aid may be assessed differently than in previous years. Make sure to familiarize yourself with the updated guidelines to ensure you’re maximizing your eligibility.
- Multiple Children in College: For parents with multiple children in college at the same time, the new FAFSA will no longer provide an advantage in the form of a reduced parent contribution. The current FAFSA divides the parent contribution by the number of children in college, but the new FAFSA does not. This change has the potential to significantly decrease aid eligibility for middle and high-income students.
- Gift Reporting: Cash support and other money paid on a student’s behalf – for example a gift of money from a relative or a distribution from a grandparent-owned 529 plan – will no longer need to be reported.
- Increased Income Shielding: The income protection allowance, which shields a portion of income from consideration, will increase by 20% for parents and by 35% for most students.
- Pell Grant expansion: The new FAFSA will expand Pell Grants to more students and will link eligibility to family size and the federal poverty level.
These are just a handful of the key changes coming your way with the simplified FAFSA for 2024-2025. Navigating the world of financial aid can be overwhelming, but these modifications aim to make the process more accessible and less daunting.
Remember, the simplified FAFSA for 2024-2025 will be available for students applying for financial aid for the upcoming academic year. So, if someone in your family is planning to attend college during the 2024-2025 year, get ready to take advantage of these positive changes in December 2023.
We hope this news brings a sigh of relief and excitement as you embark on your college journey. Stay tuned for more updates as we approach the implementation of the simplified FAFSA for 2024-2025.
Contact your BlueSky advisory team if you’d like to discuss how these changes may impact your education planning or college savings strategy.