Roughly 18 million college students apply for financial aid each year through the Free Application for Federal Student Aid. The U.S. Department of Education develops the FAFSA form and disburses aid to students at 5,600 colleges and career schools each year.
The FAFSA is also used by colleges and universities to determine eligibility for their own free grants and scholarships.
Due to the implementation of extensive changes based on the FAFSA Simplification Act, the Department of Education delayed the usual October 1 launch date to December this year for the 2024-2025 application. The exact date has not yet been released.
Changes to the form began over the last three years and some of the more impactful changes will occur on the 2024-2025 FAFSA form.
What this means for students who are applying now to college for admission for the fall of 2024 or who are current college students, is that their aid eligibility may be affected. Some changes are expected to help students, and some are expected to have a negative impact on eligibility.
It also means that schools which have historically released earlier financial aid offer letters to freshmen applicants, will likely be scrambling to review the FAFSA applications once the form opens and may have to delay their offer notifications to freshman.
Some of the FAFSA changes that may have a negative impact on student eligibility are:
- The number of family members in college is no longer a factor in the need analysis. The “sibling discount”, which could make a student eligible for more aid, is going away. However, based on comments from administration officials from a sampling of schools that use the CSS Profile, many colleges likely will continue to give some form of sibling discount.
- The net worth of a business is no longer limited to those with more than 100 full-time employees. Applicants must report the net worth of all businesses.
Some of the FAFSA changes that may have a positive impact on student eligibility or be a benefit to students are:
- The FAFSA will have significantly fewer questions.
- The FAFSA EFC (Expected Family Contribution) name has changed to FAFSA SAI (Student Aid Index) which helps avoid confusion as this number is for determining eligibility and is not associated with what a family or student “is expected” to pay.
- Some untaxed income items have been eliminated such as: payments made to tax-deferred pension and retirement plans that are paid directly or withheld from earnings; money received by or paid for on behalf of the student; and veterans’ noneducational benefits.
- For dependent students, education savings accounts will only be counted as a parent asset if the account is designated for the student. Previously, if a parent had education savings accounts for other children, the value of those were also required to be counted.
- Students may now list up to twenty colleges on the form, rather than the previous ten.
One important outcome of the FAFSA change is unclear: how schools will adjust aid (or not) for current students. Students and families will have to wait and see how the new FAFSA, and their school’s policy changes, will affect their financial aid for their remaining college years.
One Final Note about the FAFSA Form: every student should complete the FAFSA form. Free money can be left behind if a student does not submit the form, especially in year one.
Some colleges require the form to be submitted to qualify for a merit scholarship, even though it is not need-based. Also, some colleges award additional grants in the form of free money, just for completing and submitting the FAFSA, regardless of eligibility.
You can register here for an FSA ID and use the same link to complete the FAFSA when the application opens.
Parents of students applying for admission for Fall of 2024 can use the Net Price Calculators on their schools’ websites to get an idea of eligibility before the FAFSA becomes available.
You can also receive a College Money Report (for three schools on your list) by visiting the Resources page on the Moore Financial Advisors website.
We will post updates on the FAFSA release date when they are available.