One of the most important aspects of applying to college is understanding financial aid. Whether you're an incoming first-year student or already have a few years behind you, the Free Application for Federal Student Aid (FAFSA) is the best way to see if you qualify for free financial aid.
The Free Application for Federal Student Aid (FAFSA) is a critical document for students seeking financial assistance for their higher education. As of 2023, the FAFSA has undergone significant changes, bringing about a wave of adjustments and improvements. Through this blog, we'll explore everything you need to know about the FAFSA changes, covering key modifications, the potential impact on students, and how to navigate through all those changes.
Understanding the FAFSA 2023-25 Changes
One of the biggest changes made to the FAFSA application this year is its length. The application will be much shorter and rely almost entirely on parents' tax returns from two years prior. This would contribute to the application being a more straightforward financial aid application. There are a few more detailed changes that you can expect.
Application Availability
Typically, the FAFSA becomes available on October 1 the year prior to the academic year. For example, the FAFSA for the 2022-23 academic year became available on October 1, 2021. While the FAFSA for 2024-25 was originally planned to be on schedule, it won’t be available until December 2023.
Student Eligibility
Earlier, student eligibility was determined using the Expected Family Contribution (EFC), an estimate of how much a student and their family can afford to pay for college. This number is calculated based on several factors, including family size, income, taxes, and assets. Starting in 2023, the EFC will become the Student Aid Index (SAI). The SAI will largely be calculated in the same way as the EFC, but the shift in terminology communicates that this number doesn’t necessarily reflect the amount the family is expected to contribute.
The difference between the EFC and the SAI is that where the minimum amount under the EFC model was $0, the SAI model will allow for a negative amount of $1,500. This may help students qualify for more assistance and better identify those with a higher need. In addition, eligibility may change for families who have multiple students in college or who run family businesses or farms that generate income.
Pell Grant Qualification
Qualification for the federal Pell Grant will now largely be based on family size and income with fewer influencing factors. This means families may be able to get an idea of how much they qualify for before even filing for financial aid.
Additionally, there will be a higher income threshold to consider assets for families receiving means-tested benefits, like federal and state welfare programs. In short, more students will have the opportunity to qualify for the Pell Grant.
Which Parent Fills Out the FAFSA in a Divorce or Separation
New regulations dictate which parent’s income will be included on the FAFSA application in families where parents are divorced or separated. Under the FAFSA 2023-25 changes, the custodial parent (i.e., the parent who has guardianship for the majority of the year) should fill out the FAFSA. In cases where parents share equal custody, the responsibility may default to the parent or household with the highest adjusted gross income (AGI).
Financial Gift Consequences
In previous years, families were required to report any financial gifts provided to students for college expenses. So, if a relative provided financial support for a student’s education, it impacted their family’s income—and in turn, their EFC.
Under the FAFSA 2023-25 changes, this is no longer a requirement. This means students who receive outside support to pay for college don’t have to worry about jeopardizing their financial aid eligibility.
Navigating the Changes: Tips for Success
Apply Early
Since the FAFSA application won't be available until December 2023, you should have enough time to get everything ready to go by the end of November so you can start your application as soon as it's available to file. Ensure your parent has their tax documents from two years prior and gather any other documentation you might need ahead of time to avoid last-minute hassles.
Send your FAFSA to All Potential Schools
Don't limit your options by sending your FAFSA application only to the school you wish to attend, send it to all the schools you're considering. Your financial aid offers can sometimes play a big part in your decision of acceptance. By sending your FAFSA results to all schools, you can get a clearer picture of your options.
Know How Much You Need
After you send your FAFSA results to all of your potential schools, they’ll send you financial aid offer letters that explain how much federal aid, state aid, and any institutional aid you may qualify for. Before you get your letters, sit down with your family and get an idea of what you can afford. Will they be able to help you with monthly expenses? Keep in mind that you’ll need some buffer room in your budget to account for everyday expenses.
The FAFSA changes from 2023 to 2025 mark a significant step forward in making higher education more accessible and equitable. By understanding these modifications and following the tips outlined in this guide, students and their families can navigate the FAFSA application process with confidence, ensuring that financial barriers don't hinder the pursuit of educational dreams.
SOURCES
“(Gen-23-11) Fafsa Simplification Act Changes for Implementation in 2024-25.” FAFSA Simplification Act Changes for Implementation in 2024-25 | Knowledge Center. n.d. Web. 20 Nov. 2023.
Federal Student Aid. n.d. Web. 20 Nov. 2023.
“What to Know about the FAFSA 2023-25 Changes.” The FAFSA 2023-25 Changes: What You Need to Know - Azusa Pacific University. n.d. Web. 20 Nov. 2023.
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