2024-2025 FAFSA Simplification Act

FAFSA Simplification Act - What is it?

The FAFSA Simplification Act represents a significant overhaul of the processes and systems used to award federal student aid starting with the 2024–25 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.

“FAFSA Simplification” - Is the new form really simplified?

Yes! The FAFSA form now has fewer questions, and more students and parents can easily transfer their financial info from the IRS to the FAFSA. This upgrade makes submitting your FAFSA faster and simpler!

Key Changes and FAQs

  1. FSA ID: To complete the online FAFSA, everyone must have an FSA ID for access. FSA is working on a process for those without Social Security numbers to obtain an ID and access the FAFSA. Ensure your FSA ID is created and confirmed before accessing the FAFSA.

  2. FSA ID Two-Step Verification: Logging into the 2024-25 FAFSA with your FSA ID involves a two-step authentication process for everyone. Use various verification methods (email, text, authentication apps) to make this process smoother. Collaborate with student, parents, or spouses if completing information for different roles.

  3. Number in College: The Student Aid Index (SAI) formula will no longer consider the number in college. This change can affect students with multiple siblings in college, potentially resulting in a higher SAI without any income changes.

  4. Family Size: Household size is now known as family size, determined by exemptions claimed on federal tax returns. You can adjust it to match your current situation.

  5. Number of Colleges Listed: Now, you can list up to 20 colleges on the FAFSA, making it more convenient for students applying to over 10 colleges.

  6. Role-based Form: Each person's FAFSA role corresponds to specific questions. Students, parents, or spouses will see questions relevant to their role. After everyone completes their role-specific questions, you can submit the FAFSA.

  7. Assets: Families with an adjusted gross income above $60,000 (previously $50,000) or specific schedules must report assets. There are no exemptions for reporting net business or family farm value. Some current FAFSA filers may see an increased SAI due to the inclusion of all business or farm net values, even with no income changes.

  8. Negative SAI: The new SAI formula may yield a negative SAI down to -1500, applicable to non-filer families. However, it won't result in a larger Pell Grant than a zero SAI, and colleges can't award more than the cost of attendance.

  9. Pell Grant Eligibility: Pell Grant eligibility is determined by the SAI and Federal Poverty Tables, accounting for family makeup, size, and income. If a student meets the Poverty Table guidelines for the maximum or minimum Pell award and the SAI calculation, they will receive the higher Pell Grant amount determined by these two separate formulas.

  10. Identifying Contributors (Roles): When starting the FAFSA, students will identify parents or spouses contributing financial information. It's crucial to enter their information as it appears in their FSA ID for matching and access to the student's FAFSA.

Q: What is the Better FAFSA?

A: The 2024-25 Free Application for Federal Student Aid (FAFSA), branded as the "Better FAFSA," includes the biggest changes to the form and process in decades. The Better FAFSA will translate to a shorter and simpler form, increased eligibility for Pell Grants, and a reduction in verification, allowing more students access the financial aid they need to attend college.

Q: Why is the form opening in December instead of the standard October 1 date?

A: Federal legislation passed in 2020 dictated the largest overhaul of the FAFSA form and filing system since the mid-1990s. The new form and user experience required purchasing new platforms as well as a total redesign which in turn required a long timeframe for preparation. The form should open on October 1 in coming years.

Q: Will a student or parent be able to access the 2024-25 FAFSA without an FSA ID?

A: No. Every student, parent, or spouse that wishes to log in and complete or sign the FAFSA will need to have a verified FSA ID. You will no longer be able to access a FAFSA with student demographic information only. It takes one-to-three days (up to two weeks) for an FSA ID to go through the verification process. Everyone should anticipate setting up their FSA ID at least two weeks prior to starting the FAFSA.

Q: Will individuals without Social Security numbers (SSN) be able to secure an FSA ID to use with the 2024-25 FAFSA?

A: Yes. FSA is in the process of enhancing the FSA ID process so that individuals without SSNs will be able to establish an FSA ID to access and sign the FAFSA. There will be alternative steps for verifying one’s identity within the process. Complete details of those new steps have not yet been released. FSA will use TransUnion services to ask knowledge-based questions to help with identity verification. Examples of these questions may include current or former address, a previous phone number, an employer, or a home/auto loan. Answers will be multiple choice (including “none of the above”). The signature page process has been eliminated with the new form. Those without Social Security numbers will not need an ITIN to set up an FSA ID.

Q: What if the parent cannot successfully set up an FSA ID in the new process?

A: If an individual’s identity cannot be verified through the online process, there will be an option to contact FSA and submit documentation (unspecified at this point) to help establish identity and therefore create an FSA ID. If both processes do not allow for establishing an FSA ID, the student and parent(s) will need to complete the paper version of the form and submit it via the regular mail process. The paper form has more pages than in previous years and may require extra postage for mailing.

Q: The FSA ID login process requires a two-step verification (i.e., multifactor authentication) process to access the FAFSA. What if the email, text, or authenticator application verification does not work?

A: When establishing your FSA ID or when you last logged in, you should have been provided a one-time back up code. This code can be used when all other forms of verification fail. Make sure to write this code down and keep it in a secure location in case you need to use it. Once you have used the code, you will need to log into your FSA ID account and a new code will be generated. Keep the new code in a secure location.

Q: What is the new name for the Expected Family Contribution (EFC)?

A: The EFC has been renamed the Student Aid Index (SAI) to better reflect that this number is an indicator that colleges can use to determine the need level for the student.

Q: Will the number of family members in college still be used in determining the SAI?

A: No. The new legislation removed the number of family members in college from the formula. However, the question will remain on the form and will be required to be answered. This information may be used by the colleges if they wish to take it into consideration when awarding institutional aid.

Q: Will small business and family farm net values still be exempt when reporting assets?

A: No. The new legislation removed the exemption for reporting the net value of businesses with less than 100 employees and family farms. The net value of these assets will need to be included when the student/family is required to answer the asset questions.

Q: Will annual payments to all tax-deferred pensions need to be reported on the FAFSA?

A: No. Only payments to tax-deferred pensions that are reported on the federal tax form will be taken into consideration for the formula.

Q: What type of guidance will be available to help determine which parent(s)’s financial information is to be submitted on the FAFSA in cases of separation and/or divorce?

A: FSA will be producing a parent infographic document that can help guide the answer about which parent(s) to report and that should be available in September 2024. There will also be a Parent Wizard set of questions in the web version of the form that can help guide a student about which parent(s) need to provide information on the form.




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