Process for 2024-2025
The FAFSA Simplification Act was passed by Congress on December 27th, 2020 as a part of the Consolidated Appropriations Act, 2021 resulting in a substantial revamp of the processes and systems used to award federal student aid starting with the 2024-2025 award year. This includes the Free Application for Federal Student Aid (FAFSA®) form, need analysis, and many policies and procedures for schools that participate in federal student aid programs.
The law will also affect every state that uses FAFSA data to award state grant aid and every school that participates in the federal student aid programs.
Important Changes for 2024-2025
- FAFSA application opens in December 2023instead of the usual October date.
- Both students and parents must create a Student Aid Account to get an FSA ID before completing the form. Allow at least three days.
- If parents are divorced or separated, the parent who provided the most financial support in the last calendar year will now complete the FAFSA.
- The number of students a family has enrolled in college will no longer factor into the FAFSA calculation.
- The net worth of family farms and small businesses will now be required as part of the application.
- The modifications to family definition will help align more with what was reported on the student/parent’s tax returns.
- Beginning with 2024-25, all persons on the FAFSA must provide consent for the Department of Education to receive tax information or confirmation of non-filing status directly from the IRS. In a very small number of cases, students and families will have to enter their tax data manually, but for most, that data will automatically be transferred into the application. Failure to provide consent will make the student ineligible for FAFSA completion.
- A contributor—a new term being introduced on the 2024-25 FAFSA—refers to anyone who is required to provide information on a student’s form (such as a parent/stepparent or spouse).
- A student’s or parent’s answers on the FAFSA will determine which contributors (if any) will be required to provide information.
- Contributors will receive an email informing them that they’ve been identified as such and will need to log in using their own FSA ID (if they don’t already have one) to provide the required information on the student’s FAFSA.
- Being a contributor does not mean they are financially responsible for the student’s education costs, but it does mean the contributor must provide information on the FAFSA or the application will be considered incomplete, and the student will not be eligible for federal student aid.
- Student Aid Index (SAI)- The SAI will replace the Expected Family Contribution (EFC). The new formula will be used to determine a student’s eligibility for Federal Pell Grant and other need-based aid.
- Federal Tax Information (FTI)- Formerly known as the Federal Tax Return/Transcript, both students and parents will need FTI from 2022 to complete the 2024-2025 FAFSA.
Benefits of the FAFSA Simplification Act
- Streamlined application process (from 108 questions to 46 questions).
- Expanded eligibility for federal student aid.
- Reduced barriers for many student populations including homeless and unaccompanied youth, incarcerated students, English language learners, and students from low-income backgrounds.
- Step-by-step instructions for filling out the FAFSA are available at “8 Easy Steps for Parents Completing the FAFSA Form.”
Things that Are Not Changing
- The FAFSA will still be required for consideration of federal and state financial aid every year.
- Dependency status questions that determine if parent(s) must complete the FAFSA will remain the same.
- The FAFSA will still request tax information from the prior-prior year, which means you’ll report 2022 income and assets on the 2024-25 application.
- The FAFSA Simplification Act also removes questions about Selective Service registration and drug convictions. It also adds questions about applicants’ sex, race, and ethnicity, which have no effect on federal student aid eligibility.