While most of the focus this year in planning surrounding education is on provisions of the SECURE Act 2.0 that allow for new flexibility with unused funds in certain education savings accounts, there are six key changes to financial aid that may have slipped under the radar:
- Need for Free Application for Federal Student Aid (FAFSA) ID: For the 2024-2025 school year, anyone required to fill out part of a student’s FAFSA must create their own FAFSA ID and password. The ID can be set up on the StudentAid.gov website.
- Shorter FAFSA form: The new FAFSA form is simplified and a lot shorter, from roughly 100 questions down to 35. Questions relating to drug-related convictions and gender have been removed. Students and families can also now import their tax records, which can help expedite the process.
- Changes to the Expected Family Contribution (EFC): The EFC is the calculation used to determine aid eligibility and amount. The EFC will be renamed the Student Aid Index (SAI). Colleges will use this to determine need relative to other applicants. The SAI is expected to clarify much of the confusion around the eligibility process.
- Eligibility changes for those with multiple children: One of the biggest changes to the FAFSA affects parents with two or more kids in college at the same time. In the older form, the calculations would allow for the family to have a lower EFC per student. They received increased aid eligibility, which parents with kids who are farther apart did not receive. The new rule may result in those with kids in college at the same time receiving less aid than before.
- Change in who files FAFSA: Previously the custodial parent filed the FAFSA forms in the case of a divorce. A new rule states that the parent responsible for filing the FAFSA will be based on whichever provides more financial support to the student, regardless with whom the student resides.
- Reporting requirements for family farms and small businesses: FAFSA will now require families to report their family farm or small business net worth, and this will be considered an asset while calculating the SAI.
For more information please consult: https://studentaid.gov/help-center/answers/article/fafsa-simplification-act
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.