A new and much-anticipated version of the college financial aid form, the FAFSA, will be released for the 2024-25 school year. The aim of the new form is to simplify the process of applying for college aid as studies have shown that those who complete a FAFSA are more likely to attend college. In addition to updating the form itself, the federal government is also expanding eligibility for federal aid, marking the biggest overhaul in decades. However, some families with multiple children in college may qualify for less assistance due to changes in the form’s underlying aid formula.
The FAFSA is a form that college students must file each year in order to receive financial aid from the federal government. Many states and colleges also base their own aid on the federal form. The FAFSA collects detailed financial information about income and assets from students and their parents and serves as a gateway to grants, scholarships, and loans for higher education. Congress approved changes to the form and its formula in 2020, but the Education Department has taken several years to complete the update.
The changes to the form include shielding more of a family’s income from the aid calculation, which increases eligibility for financial help. More students will be eligible for federal need-based Pell grants, and those who previously received partial grants will be eligible for larger amounts. However, the update also eliminated the “sibling discount” for families with multiple children in college. Around one-third of college students have a sibling who is also enrolled, and this change in aid eligibility may come as a surprise to many families, especially those with currently enrolled students who will see a change in their aid package for the upcoming school year.
One justification for the change is that financing a college education typically involves long-term saving and borrowing, so it is unfair to give a break to families solely because they have twins or children close in age attending college simultaneously. However, it is concerning that the new formula is going into effect with little warning to students and their parents. Some colleges may be able to adjust financial aid packages to compensate, but this depends on the institution’s finances.
The new form will also see changes such as replacing the confusing “expected family contribution” with the “student aid index,” which will serve as a guideline for the amount of financial help a student qualifies for. The number of questions on the form has been greatly reduced, and transferring federal income tax forms into the application has been streamlined.
The new FAFSA form will be available online in December, which is later than usual and may impact the ability of students to meet state priority filing deadlines for receiving aid. Students are advised to apply for a Federal Student Aid ID now to save time when the new form becomes available. It is also recommended that students apply to a mix of colleges, including in-state public colleges, to ensure they have affordable options.
These changes will not affect financial aid packages for the current academic year. The financial aid packages for the 2023-24 academic year were based on the form that was available in October 2022.
In conclusion, the new version of the FAFSA aims to simplify the process of applying for college aid, but some families may qualify for less assistance due to changes in the aid formula. Students and their parents should be prepared for these changes and make sure to complete the form in a timely manner to meet state priority filing deadlines.