Families should expect considerable changes to the Free Application for Federal Student Aid, known as the FAFSA, which was released in a soft launch format in December 2023.
Filing the FAFSA is required for students who wish to be considered for federal financial aid. Colleges and states use the form to determine eligibility for grants and scholarships. Students must reapply each year to receive aid.
The final date to submit the 2024-2025 FAFSA is June 30, 2025, but deadlines vary among institutions and states, especially this filing year.
Here are some changes — stemming from the FAFSA Simplification Act, which was enacted in December 2020 — to the 2024-2025 form that students and their families should note.
Delayed Open Date
The FAFSA typically opens on Oct. 1, well before early college application deadlines. But because of significant changes made to the form, that date was pushed to December for the 2024-2025 application. Since the rollout of the form, students, families and institutions have continued to experience FAFSA delays.
While families can fill out the form as soon as it opens, colleges won’t receive submitted aid eligibility information until the first half of March 2024, according to the U.S. Department of Education, which is implementing the changes. Institutions were initially informed they’d be sent that information by at least the end of January 2024.
[Read: An Ultimate Guide to Understanding College Financial Aid.]
“These continued delays, communicated at the last minute, threaten to harm the very students and families that federal student aid is intended to help,” Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, said in a statement issued immediately after the Education Department’s Jan. 30 announcement of the latest delay.
Reduced Number of Questions
For years, many families have found the FAFSA to be confusing. In an attempt to streamline the process for families, the maximum number of questions on the 2024-2025 form was reduced from more than 100 to about 40. And as many as 26 of those fewer questions can be skipped in certain cases, meaning some applicants can complete the form in less than 10 minutes, according to the Education Department.
“It is much simpler than it used to be,” says Michael J. Knox, vice president for enrollment management at West Texas A&M University. “So I hope it’s less intimidating to do. I hope students and their parents don’t put it off. It’s kind of been known for a long time that it’s a beating to do it and I don’t think that’s going to be true anymore.”
Although the FAFSA originally was offered only in English and Spanish, the 2024-2025 application is available in 11 languages. Students can also list up to 20 colleges on the online form, instead of the previous 10.
Mandatory Creation of the FSA ID
Every contributor — which is defined as anyone who is required to provide information on a student’s form — must have a verified FSA ID. Approval takes one to three days, so experts advise families to create their FSA IDs ahead of time.
Parents without a Social Security number can now create an FSA ID, but there will be additional steps to verify their identity.
[Read: What You Need to Know About College Tuition Costs.]
Changes to the Need Analysis Formula
Beginning with the 2024-2025 award year, the Expected Family Contribution — a formula to determine financial aid eligibility — is now known as the Student Aid Index. The new need analysis formula will remove the number of family members in college from the calculation, take family farms and small businesses into consideration and create separate eligibility criteria for Pell Grants — a federal award based on financial need.
Additionally, for dependent filers with divorced or separated parents, the parent who provided the most financial support is required to provide their financial information. Previously, it was the parent that the student lived with the most over the last year.
“The biggest change for parents and students who’ve had an EFC before is that they can see a negative number and that may throw them off,” says Sara Reese, director of compliance at College Aid Services, a higher education consulting firm.
Expanded Access to Pell Grants
Under the new changes, a “significantly greater number of students will be eligible for the full Pell Grant and more students will be eligible for Pell Grants overall,” says John Gudvangen, associate vice chancellor of enrollment and director of financial aid at the University of Denver in Colorado. According to the Education Department, due to the redesign, 610,000 new students from low-income backgrounds could receive Pell Grants in the 2024-2025 aid cycle.
Pell Grant eligibility is linked to family household size and the federal poverty level. For instance, families will receive the maximum Pell Grant award if they earned less than 175% of the federal poverty level, or are a single parent who made less than 225% of the federal poverty level. To qualify for the minimum amount, a student’s household income must be below 275%, 325%, 350% or 400% of the poverty level, depending on household size.
[Read: How to Pay for College Using These Overlooked Strategies.]
Required Consent for IRS Data Transfer
In addition to SAI replacing EFC, another aspect of the form was renamed. The IRS Data Retrieval Tool — which automatically transfers tax information to the online application — was replaced by the IRS Direct Data Exchange, or DDX.
As part of this process, federal tax information is shared directly by the IRS with the Education Department to calculate a student’s SAI. All FAFSA contributors are required to agree to DDX.
“Because of the direct data exchange with the IRS and the consent that’s required, we hope it will really limit the number of students who need to provide additional information as a result of federal verification rules,” Gudvangen says. “That’s a good thing. That means that the process should become more streamlined. The department has never been transparent about what triggers verification. But we anticipate that there would be fewer reasons to verify when you know that the data has come from the IRS.”
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What’s New on the 2024-2025 FAFSA originally appeared on usnews.com
Update 01/31/24: This article was published at an earlier date and has been updated with new information.
