The rollout of the much-heralded simplified Free Application for Federal Student Aid (FAFSA) hasn’t gone as smoothly as anyone hoped — not for the U.S. Department of Education (ED), not for the parents and students who complete the application, and certainly not for the colleges and universities that rely on it to make financial aid awards. Educational institutions are monitoring the evolving situation and preparing to manage the awards process in a compressed time frame. Here’s a roundup of late-breaking news and guidance that can help.
FAFSA changes include new terminology and calculations
In August 2023, ED provided a summary of the new FAFSA’s major differences from previous applications. Key changes to the 2024-2025 FAFSA include:
- Replacing the Expected Family Contribution (EFC) with the Student Aid Index (SAI). This change reduces confusion about costs to families.
- No longer considering the number of family members in college. The updated FAFSA doesn’t use this data point as a factor in determining eligibility for aid.
- Eliminating the Simplified Needs Test. A family’s adjusted gross income governs which applicants are exempt from asset reporting and automatically qualifies eligible families to receive the full Pell Grant amount.
- Identifying especially needy applicants with a negative SAI. Unlike the EFC, the SAI can drop to -1500 for some applicants.
- Relying on IRS data when possible. Using tax data taken directly from the IRS allows for more accurate reporting and makes it easier for applicants to complete the FAFSA.
A “Dear Colleague” letter presents more details about the latest updates as well as changes in recent years. Together, these modifications represent a major overhaul to align the FAFSA with requirements in the Consolidated Appropriations Acts of 2021 and 2022.
SAI inflation updates mean schools will not see info until March 2024
Student aid awards hinge on the SAI, but the index lacked inflation-based adjustments when the new FAFSA first went live. That meant that many students wouldn’t get all the aid they should. ED is working feverishly to create inflation-adjusted tables that support SAI calculations and add them to the Federal Processing System, further delaying this year’s financial aid cycle.
Instead of October, when it typically begins, the 2024-2025 application finished beta testing and became fully active by early January 2024. However, incorporating the required inflation-adjusted tables once again pushed out the date for educational institutions and state financial aid agencies to receive student data. The latest word from ED is that batches of processed FAFSA data will start going out in the “first half of March” and continue over a period of the following weeks.
Industry groups encourage flexibility on deadlines
Given the delays and confusion, many national associations in higher education are advising colleges and universities to allow students more time for enrollment and financial aid decisions. Colleges and universities won’t get data until March 2024 at the earliest, which pushes out the dates that applicants will receive their financial aid award letters. As a result, families may need extra time to consider their options and make final plans. These national associations have signed a joint statement that reads:
“Due to the continued delays in the availability of FAFSA applicant data announced by the U.S. Department of Education, we encourage colleges and universities to provide flexibility to students and families as they consider their offers of admission and financial aid.
During the pandemic, many institutions extended their enrollment, scholarship, and financial aid deadlines beyond the traditional May 1 date, and we urge institutions to make similar accommodations this year. We all want students and families to have the time they need to consider their financial options before making enrollment decisions.”
ED will provide practical support to colleges and universities
Flexible dates can make things easier on parents and students, but who’s making things easier for the colleges and universities they’ll attend? Actually, ED is attempting to do just that by offering practical support and easing regulations during this difficult financial aid year.
ED understands the pressure that FAFSA changes and delays are creating for schools. In response it is lowering rates of required verification, suspending most new program reviews and waiving the 90-day requirement for institutions to recertify their eligibility for federal financial aid programs. Colleges and universities can submit recertification applications any time before the date of expiration for Program Participation Agreements (PPA) that expire in March, June or September of 2024.
In addition, ED is offering federal personnel to assist colleges and universities, especially those with fewer resources, and providing $50 million to help these institutions manage the transition. The dedicated funding will help financial aid departments bring on more staff to offer technical assistance, training and other support for schools that could use the extra help, including Historically Black Colleges and Universities (HBCUs) and Tribal Colleges and Universities (TCUs).
There’s also a brand-new concierge service that’s now a part of the Federal Student Aid (FSA). If you need help or advice, you can request it by emailing CollegeSupportStrategy-FAFSA@ed.gov.
Don’t let FAFSA updates derail your progress
We will watch FSA’s concierge service with interest. It’s a nice idea, but most schools need more comprehensive support than an over-stretched ED can provide on an individual basis. Count on the experienced higher education industry advisors at Mauldin & Jenkins for the customized answers and strategic guidance you need this year — and every year. We understand what you’re going through and bring the expertise to help you manage it all.
