The FAFSA Simplification Act is here

The current Free Application for Federal Student Aid (FAFSA) application requires students to navigate and interpret financial aid language, answer over 100 questions and interpret tax returns in order to submit their application. The FAFSA is paramount for students that are seeking financial aid to cover the cost of their higher education and can be a daunting process. Recognizing the challenges, the FAFSA Simplification Act (Act) was enacted into law with an intent to make the process easier, and thus, more accessible for students seeking financial aid.

The Act, signed into law as part of the Consolidated Appropriations Act of 2021 and amended by the Consolidated Appropriations Act of 2022, made important changes to the Higher Education Act of 1965 (HEA) and the FAFSA. Significant changes are being made to the impact need analysis as well as to policies and procedures for institutions that participate in Title IV programs.

The U.S. Department of Education (ED) has set forth a phased implementation, with full implementation required by July 1, 2024. Consequently, the 2024-2025 FAFSA is expected to be available in December 2023 (rather than October 2023) and will incorporate the new provisions provided for in the Act. 

The FAFSA Simplification Act makes changes to the FAFSA for the first time in 40 years and aims to streamline the application process, remove barriers for key student populations and expand federal aid eligibility. Notable changes to the FAFSA include the following:

Replacing the Expected Family Contribution (EFC) with the Student Aid Index (SAI)

• The change in methodology used to determine aid removes the number of family members in college from the calculation, allows a minimum SAI of negative $1,500 and implements separate eligibly determination criteria for Federal Pell Grants.

Modifies the family definitions in FAFSA formulas

• Changes in how a student’s family size is determined to align with student/parent tax return reporting.