For the 2024-25 school year, a long-awaited, supposedly user-friendly version of the college financial aid form known as FAFSA is unveiled.
The new form aims to simplify the student aid application process, as it has been found that those who complete a FAFSA (Free Application for Federal Student Aid) are more likely to attend college. In addition to updating the form, the federal government is expanding eligibility for federal aid as part of the biggest overhaul in decades.
But some families with more than one child studying at a time may be less eligible for support. That’s because the revision also streamlined the benefit formula underlying the form, effectively eliminating a “sibling discount.”
“There are winners and losers,” said Phillip Levine, an economics professor at Wellesley College and a foreign fellow at the Brookings Institution, who co-authored a report on the changes ahead.
College students must submit the form each year 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 on the income and assets of students and their parents and serves as a gateway to higher education grants, scholarships and loans. Congress approved changes to both the form and its formula in 2020, but it took the Department of Education several years to complete the update.
Some changes, such as excluding more family income from benefit calculations, tend to increase eligibility for financial assistance. More students will be eligible for federal needs-based Pell Scholarships, and those who previously received partial scholarships will be eligible for larger amounts, said MorraLee Keller, senior director of strategic programming at the National College Attainment Network.
However, the update also eliminated a discount for families with multiple children in college. About a third of college students have a sibling who is also enrolled, said Dr. Levine. The change in eligibility for some families with multiple college students could be significant and unexpected, he said — particularly for currently enrolled students who will see a change in their aid package for the upcoming school year.
“Their price is going to go up a lot soon, and they don’t know it,” said Dr. Levine. His report includes an online tool that families can use to assess the impact their help could have.
One reason for the change is that financing a college education now involves long-term saving and borrowing, and most people can no longer pay for it on their current income. So it’s unfair to give families a break because they have twins or children of the same age who are in college at the same time, but not people whose children are further apart.
It is worrying that the new formula will go into effect without giving students and their parents any advance warning, said Dr. Levine. “The problem is that you flip a switch,” he said, giving some current students little time to prepare for a potentially larger deductible. Some colleges may be able to adjust their financial aid packages to compensate, but this depends on the institution’s finances.
Mark Kantrowitz, a financial aid expert, said the elimination of the sibling discount will have the biggest impact on middle- and high-income students.
While the number of students in college is no longer a factor in the federal formula, FAFSA still has a question about the number of family members in college, said Karen McCarthy, vice president of public policy and federal relations at the National Association of Student Grant Administrators. Universities may consider the information and may make adjustments through a process known as “professional judgment”.
If a student receives an aid package from a college that isn’t sufficient, Ms McCarthy said, “I recommend contacting the financial aid office to see what can be done.”
Other expected changes to the form include replacing the confusing “expected family contribution,” a figure that estimates what a family may have to pay, with the “student allowance index,” a sort of guide to the amount of financial assistance a student may need gets qualified.
The federal government says the number of questions on the form has been greatly reduced, but Ms McCarthy said the number you would have to answer depends on your circumstances. Still, she said, “we think it will be an easier process for families.”
For example, the transfer of federal income tax forms from the Internal Revenue Service to the application has been streamlined and should be seamless after users approve the transfer, rather than requiring multiple cumbersome steps, Ms McCarthy said.
Here are some questions and answers about the new form:
When can I file the new FAFSA?
In recent years, the form became available online on October 1st. This year, however, it will only be available on a date in December that has yet to be determined, according to the Federal Office for Student Aid. This reduces the time it takes many students to fill out the form to meet state priority submission deadlines, which begin at the beginning of the New Year. (In many states, aid is distributed on a first-come, first-served basis, so applying early increases your chances of receiving aid.)
March deadlines are the most common, Dustin Weeden, associate vice president of the State Higher Education Executive Officers Association, said in an email. Some states are keeping those deadlines for next year, especially if the date is later in the month, while some, including California and Tennessee, have pushed their deadlines back to April.
Texas is in the process of adjusting its January 15 priority deadline for next year, Mr Weeden said.
Students should keep an eye out for government campaigns this fall and make them aware that the form will be available later than usual and will bring some changes, he said. “These outreach efforts are a top priority for states this fall,” he added.
Is there anything I can do now to prepare for the new form?
To fill out the form, you need a Federal Student Aid Card, which consists of a user name and a password. If you don’t already have a badge, creating one now can save time when the new form comes out. Apply for the ID card online. You will need your social security number, full name and date of birth. (Currently, you can fill out the FAFSA online without ID and send in a signature page, Ms. Keller said. But the new Form 2024-25 requires user IDs, the Federal Student Aid Office website says.)
Students should apply to a variety of colleges, including state public colleges, to ensure they end up in a college they can afford, Kantrowitz said.
Some highly competitive private schools use a different form, called the CSS profile, to provide institutional financial aid. It’s not clear if this form will change its approach to helping siblings. The college board, which administers the form, did not immediately respond to a request for comment.
Will these changes affect the grants for the coming academic year?
No. Financial aid packages for the school year beginning this month or September will be based on the 2023-24 school year form that became available in October 2022.