For more and more families, financial support is crucial when it comes to financing their studies.
With tuition rising, most students entering college now depend on a combination of resources to make it happen, including income and savings, free money from scholarships and grants, and of course student loans, according to education lender Sallie Mae.
But students need to fill this out first Free application for state study grant to access any help. And this year FAFSA will look very different.
The FAFSA serves as a gateway to all government assistance funds, including loans, work studies, and grants, which are the most sought-after type of assistance because they typically do not have to be repaid.
In normal years, high school seniors miss out on billions of dollars in federal scholarships because they don't fill out the FAFSA form.
Many families mistakenly assume that they are not eligible for financial assistance and don't even bother to apply. Others say that a lengthy and overly complicated application is a major hurdle.
A plan to simplify the FAFSA has been in the works for years. In 2020 is the Consolidated Appropriations Act was adopted to streamline the process. These changes are finally taking effect.
What has changed with the new FAFSA?
A new start date
For the 2024-2025 school year, the FAFSA enrollment season begins in December, two months later than previous years. (The Department of Education said it plans to return to the October 1 start date next year.)
“Due to the complexity of the simplification, there is a delay in launching the form,” said higher education expert Mark Kantrowitz.
Despite the postponement, according to Rick Castellano, a spokesman for Sallie Mae, filing the application as soon as possible is still beneficial.
The sooner families complete the FAFSA, the better their chance of receiving assistance, since some financial assistance is provided on a first-come, first-served basis or from programs with limited funds. “You want to line up,” said Castellano.
A new affordability calculation
The simplified form uses a calculation now called the Student Aid Index to estimate how much a family can afford.
Historically many factors, not only Income is about how much support students receive, including the total number of people in the household and the number of children in college, as well as other financial commitments such as a home loan or child support payments.
Now the formula retrieves federal tax information directly from the IRS.
No more sibling discounts
Going forward, the US Department of Education will no longer give families a break if they have multiple children in college at the same time, effectively eliminating the “sibling discount.”
“The elimination of multiple matching for students is one of the many tectonic shifts in the FAFSA simplification that will take full effect beginning in the 2024-2025 academic year,” said Kalman Chany, Princeton's grant advisor and author of “Paying for.” Review college.”
The elimination of multi-student adjustment is one of the many tectonic changes as part of the FAFSA simplification.
Kalman Chany
Author of “Paying for College” The Princeton Review
Previously, “student multiple matching was the most important piece of data affecting an individual's eligibility for federal student aid,” Chany said.
According to Kantrowitz, middle- and upper-income families with more than one student will be hit hardest. For lower-income students whose expected family contribution was already $0, the impact will be less.
However, this change only affects eligibility for government study grants, Chany noted. “Colleges can still make an adjustment based on the number of family members at the college when awarding their own institutional grants.”
An extension of the federal funding eligibility
At the same time, the new FAFSA will raise the family income limit, allowing more students to be eligible for need-based government support.
According to Kantrowitz, more than half a million additional students will qualify for a Pell Scholarship, a form of support for low-income families. And of those who qualify, more than 1.5 million are eligible for the maximum.
Currently, the maximum Pell Grant award is $7,395.
“It's a good first step”
Under the new system, more students will have access to federal scholarships, but some — likely wealthier — students will miss out on the sibling discount, Kantrowitz said. “That's a good first step.”
Kantrowitz predicts that there will be inevitable problems with the introduction of the new FAFSA. “It has the potential to go well, but any time there's a big change, there's always teething troubles,” he said.
With so many changes, “it's becoming more important than ever for families to plan ahead for financial help if they want to get the most help possible,” Chany advised.
