What is the FAFSA Simplification Act?
Key takeaways
- Filling out the FAFSA is one of the first steps students should take when searching for funding for higher education, as the application determines whether or not students qualify for federal financial aid.
- The FAFSA application process is now easier to complete, as the application has been simplified in recent years to make it easier for students to apply for federal financial aid.
- In some cases, students only need to fill out less than 20 questions to complete the application, significantly less than what was required prior to the changes from the FAFSA Simplification Act.
- The FAFSA Simplification Act makes it easier for students to receive Pell grants, linking eligibility to a student's family size and the poverty level set by federal guides.
Completing the Free Application for Federal Student Aid (FAFSA) is a critical step for students who want or need to obtain help funding for college. And, while completing the application can seem intimidating, it’s actually not difficult.
In fact, it’s easier than ever now, as the FAFSA application has been streamlined and simplified in recent years. Some applicants now may only need to complete about 18 questions compared to what was once more than 100 questions.
The application process was made easier for students and families as part of the FAFSA Simplification Act passed in December 2020. Here’s a breakdown of what the FAFSA now includes.
What is the FAFSA Simplification Act?
The FAFSA Simplification Act was enacted by Congress as part of the Consolidated Appropriations Act of 2021. This law reduces the number of questions you’ll have to answer on the form, makes crucial changes to the Higher Education Act of 1965 to expand Pell Grant eligibility, and removes outdated restrictions to make federal student aid more accessible to all students.
- Reducing the number of questions in the FAFSA by two-thirds, going from 108 to just 36, while changing the language in which the questions are redacted to make them more comprehensible.
- Revamping the entire Federal Student Aid website with a new platform allowing students to import tax return and personal and parental information to improve accuracy.
- Maximizing the reuse of previously collected data, including documents used to prove homelessness or dependency override, so students don’t have to collect these each year if their situation hasn’t changed.
- Expanding the living expenses allowance that are included as part of the schools’ cost of attendance to reduce shelter and food insecurity among college students.
- Repealing the limitations regarding the number of years students can receive Direct Subsidized federal loans.
- Expanding Pell Grant eligibility to students previously ineligible due to drug-related convictions or incarceration and changing how Pell Grant eligibility is calculated.
- Restoring Pell Grant lifetime eligibility for students whose schools closed while they were enrolled and those whose schools were defrauded.
- Replacing the expected family contribution (EFC) with the Student Aid Index (SAI) and replacing it with a new formula to expand access.
- Removing the requirement for male students between the ages of 18 and 25 to register with the Selective Service System to receive federal student aid.
“Although these are huge changes, we do anticipate that FAFSA simplification will be a positive experience for the majority of students and families,” says MorraLee Keller, senior director of Strategic Programming at the National College Attainment Network (NCAN).
“There will be some populations that will be impacted by the changes made to the formula related to the calculation of income and assets. But, hopefully, in those cases, maybe colleges will be ready to offer some aid if they’re at risk of losing state or federal grants to replace that,” she adds.
When does the FAFSA Simplification Act go into effect?
The FAFSA Simplification Act was initially slated to roll out by the 2023-24 FAFSA cycle, which opened on Oct. 1, 2022. However, the Department of Education decided to push the deadline by one year and instead began implementing the changes outlined in the law using a phased approach that began in the 2021-22 academic year and will end in the 2024-25 academic year.
Changes to the 2023-24 FAFSA
The 2023-24 FAFSA, which opened on Oct. 1, 2022, looks nearly the same as the previous year. Some of the changes that were incorporated included the following:
- Male students under age 26 are no longer required to register with the Selective Service System to receive federal financial aid.
- Students that have drug-related convictions won’t lose their eligibility to receive federal financial aid.
- Eligible undergraduate students who take out Direct Subsidized federal loans will be able to keep receiving their interest subsidized beyond the period exceeding 150 percent of the length of their academic program — something that wasn’t possible before.
- Incarcerated individuals currently enrolled in a Prison Education Program will be eligible for the Pell Grant.
Additionally, the Selective Service registration and the drug conviction-related questions were fully removed from the FAFSA in July 2023.
Changes to the 2024-25 FAFSA
All major revisions outlined in the FAFSA Simplification Act will take place during the 2024-25 FAFSA cycle, which opened on Oct. 1, 2022, and ends June 30, 2025.
These are the main things to be on the lookout for:
- Starting July 1, 2024, the FAFSA will only have a maximum of 36 questions instead of 108.
- The form will be available in 11 languages to benefit those who aren’t native English speakers.
- Parents of undocumented students will be able to apply for an FSA ID. This will speed up the processing time for children of undocumented students, as they’ll be able to submit the form online instead of having to print, sign and mail their application.
- The entire Federal Student Aid platform will be upgraded with tools that allow students to import tax return information, as well as their personal and parental details as soon as they start the form. This will reduce the time spent completing the form and improve information accuracy.
- The expected family contribution (EFC), which determines your financial need based on household income, family size and cost of attendance, will be replaced with the Student Aid Index (SAI). There will also be changes on how this component will be calculated.
- Those who qualify for a dependency override due to homelessness or not being able to access their parents’ financials won’t have to recertify their dependency status each year unless their situation changes.
- Students will be able to see if they qualify for the Pell Grant using their household income and family size before they even fill out the FAFSA.
- The Department of Education will be able to regulate all of the components of how schools come up with the cost of attendance, to expand students’ allowance for living expenses.
- Students whose schools closed or defrauded them will have their lifetime Pell Grant eligibility restored if they choose to return to school.
- There’s a new formula to calculate students’ income protection allowance so that a larger portion of the students’ household income remains untouched. This benefits low- and middle-income households by reducing the amount they’ll be expected to contribute toward college costs and increases the students’ financial aid.
The bottom line
The FAFSA Simplification Act impacts all college students, regardless of their income and financial situation. In some cases, financial aid will increase substantially for students, while others may see aid decrease. If you have any questions on how the FAFSA Simplification Act may change your situation, contact your school’s financial aid office, as they will be able to help crunch the numbers for you.
You may also like
Average business line of credit interest rates
How to get a personal loan with low interest rates
What is the APR on a personal loan?