Financial Aid & Cost

Why is it changing?

“FAFSA® Simplification Act: On Dec. 27, 2020, Congress passed the Consolidated Appropriations Act. The law includes provisions that amend the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act and includes the FAFSA Simplification Act—a sweeping redesign of the processes and systems used to award federal student aid. Specifically, the law makes it easier for students and families to complete and submit the Free Application for Federal Student Aid (FAFSA®) form and expands access to federal student aid.”

New terminology

This year the 2024-2025 FAFSA will be available by the end of December 2023. The form itself will be shorter and have new terminology.

Student Aid Index (SAI)

The Student Aid Index (SAI) will replace the Expected Family Contribution (EFC) on the FAFSA form. Students and families will see a different measure of their ability to pay for college and experience a change in the methodology used to determine aid.

FAFSA Contributor

Previously listed as a parent or student’s spouse, the 2024-25 FAFSA will now refer to each as a contributor.  A contributor is anyone who is asked to provide information on an applicant’s FAFSA including:

• The student
• The student’s spouse (if applicable)
• A biological or adoptive parent; or
• The spouse of a remarried parent who is on the FAFSA–the stepparent

How the student answers each section of the FAFSA will determine who will be a contributor (in addition to the student). Students will need the contributor’s name, date of birth, Social Security Number (SSN), and email address to invite them to complete the required portion of the FAFSA. Contributors will need to provide personal and financial information on their section of the FAFSA.

All contributors are required to have an FSA ID and to provide consent to have their Federal Tax Information (FTI) transferred from the IRS, have their tax data used to determine a student’s eligibility for federal student aid, and allow the U.S. Department of Education (ED) to share their tax information with institutions and state higher education agencies for the administration of Title IV aid. Consent is provided once for the award year and cannot be revoked in that award year. This consent is necessary even if the contributor does not have an SSN, did not file taxes, or filed taxes in another country.

If a dependent student’s parents are unmarried and living together, both parents will be contributors, will need to have separate FSA IDs, and need to provide consent. Dependent students whose parents filed their U.S. income tax return
as Married Filing Jointly only require one parent contributor to complete the FAFSA. If the student’s parents filed separately, both parents will be considered contributors and therefore need separate FSA IDs, and both must provide
consent.

If an independent student is married and filed separately, both individuals are contributors, must have FSA IDs, and must provide consent for the student to be eligible for Title IV aid.

Parent of Record Starting 2024-25

Effective the 2024-25 award year the parent with whom the student lived the most in the past 12 months prior to filing the FAFSA, is no longer a criterion in cases of divorced or separated parents. For divorced or separated parents, income and assets are reported for the parent who provides the most financial support even if the student does not live with that parent or lives with the other parent.

Parental Income on FAFSA

• Parents who live together: Parental income and assets in the case of student whose parents are married and not separated, or who are unmarried but live together, shall include the income and assets of both parents.
• Divorced or separated parents: Parental income and assets for a student whose parents are divorced or separated, but not remarried, is determined by including only the income and assets of the parent who provides the greater portion of the student’s financial support.
• Death of a parent: Parental income and assets in the case of the death of any parent is determined as follows: (A) If either of the parents has died, the surviving parent shall be considered a single parent, until that parent has remarried. (B) If both parents have died, the student shall not report any parental income or assets.
• Remarried parents: If a parent whose income and assets are taken into account under paragraph (2), or if a parent who is a widow or widower and whose income is taken into account under paragraph (3), has remarried, the income of that parent’s spouse shall be included in determining the parent’s assessment of adjusted available income if the student’s parent and the stepparent are married as of the date of application for the award year concerned.
• Single parent who is not divorced or separated: Parental income and assets in the case of a student whose parent is not described in paragraph (1) and is a single parent who is not divorced, separated, or remarried, shall include the income and assets of such single parent.”

Family Farms and Small Businesses

• Inclusion of family farms or small businesses: When required, families will now report the value of their farms or businesses. While this inclusion continues to be debated in Congress, it will be required to be reported for appropriate families on the 2024-25 FAFSA and can influence the SAI.

Streamlined FAFSA Application

You’ll notice fewer questions when completing the 2024-2025 FAFSA and an easier way to transfer tax information directly from the IRS.

The FAFSA Simplification Act specifies which questions can be asked on the FAFSA and prohibits the U.S. Department of Education (ED) from asking FAFSA questions that are unnecessary for Title IV federal student aid.

IRS Data Retrieval Tool (DRT) Replaced

The IRS DRT will be replaced with the Direct Data Exchange (DDX).

• Everyone (students, spouses (if applicable), and parents) will need to consent to have their Federal Tax Information (FTI) imported into the FTI module.
• To provide consent, the individual will need to access the FAFSA with an FSA ID that has been matched with the Social Security Administration (SSA).
• Federal tax filers will have their tax information imported into the FTI module. No tax income will transfer into the FAFSA, but tax data will be sent to the colleges listed on the FAFSA.
• Non-tax filers must also check the box to consent. When IRS Data is accessed, the process will verify non-filing status.

Benefits to Students, Families, and Borrowers

The FAFSA Simplification Act will expand the Federal Pell Grant to more students and link eligibility to family size and the federal poverty level. New eligibility formulas and funding are estimated to increase Pell Grant recipients by nearly 15%. Incarcerated students will regain the ability to receive a Pell Grant, and Pell Grant lifetime eligibility will be restored to students whose school closed while they were enrolled, or where subject to a false certification, identity theft, or a borrower defense loan discharge.

Accessibility to the FAFSA has been expanded to the top 11 languages spoken by English learners in the U.S.- Spanish, Chinese, Tagalog, Vietnamese, French, Arabic, Korean, Russian, German, Haitian, and Hindi.

Pell Grant Eligibility

Pell Grant eligibility will be determined in three steps:

1. Maximum Pell Grant – Applicants may qualify for a Maximum Pell Grant based on family size, adjusted gross income (AGI), and poverty guidelines. Students qualifying for a Maximum Pell Grant will have a SAI between negative $1,500 (-$,1500) and $0.
2. Student Aid Index (SAI) – Applicants who do not qualify for a Maximum Pell Grant may still qualify if their calculated SAI is less than the maximum Pell Grant award for the award year. The applicant’s Pell Grant award for full-time enrollment will be equal to the maximum Pell Grant for the award year minus SAI. The Pell Grant will be adjusted (prorated) if an applicant enrolls in less than full time, or if the applicant’s Cost of Attendance (COA) is less than the calculated Pell Grant award.
3. Minimum Pell Grant – Applicants whose SAI is greater than the maximum Pell Grant award for the award year may still qualify for a Pell Grant, based on family size, AGI, and poverty guidelines.

Automatic Pell Grants based on income household and size: Families making less than 175% and single parents making less than 225% of the federal poverty level will see their students receive a maximum Federal Pell Grant award. Minimum Pell Grants will be guaranteed to students from households below 275%, 325%, 350%, or 400% of the federal poverty level, depending on household structure. Pell awards between the maximum and minimum amounts will be determined by SAI.

Once the annual Federal Pell Grant is determined, half of the award will be offered in each semester of the award year and will be prorated by Enrollment Intensity instead of Enrollment Levels as shown below.

Year-Round Pell Grant

Previously, a Pell Grant-eligible student must have been enrolled at least half-time in a payment period during which they received more than 100% of their scheduled award. Beginning with the 2024-2025 award year, half-time enrollment is no longer required.

Unusual Circumstances

Students with unusual circumstances are defined as:

A student for whom a financial aid administrator makes a documented determination of independence by reason of unusual circumstances which prevent the student from contacting parents. These circumstances could include:

• human trafficking, as described in the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.)
• legally granted refugee or asylum status and are separate from their parents, or their parents are displaced in a foreign country
• parental abandonment or estrangement and have not been adopted
• abusive or threatening environment or
• Student or parental incarceration and contact with parents would pose a risk to the student.

Other students will continue to qualify as independent on their FAFSA form and not required to provide parental information if they:

• Are active-duty military
• Are a veteran of the U.S. Armed Forces
• Were an orphan, ward of the court or in foster care at the age of 13 or older
• Are or were a legally emancipated minor or in a legal guardianship as determined by a court in the student’s state of legal residence or
• Are a student unaccompanied and either homeless or self-supporting and at risk of being homeless

Starting with the 2024-25 Award Year, both first-time and renewal applicants who indicate on their FAFSA form that they have an unusual circumstance will be granted provisional independent status. They will be able to complete the form without providing parental information and receive an estimate of their federal student aid eligibility, which will be subject to a final determination by the institution they attend. If a student’s institution approves their unusual circumstances, their independent status will carry over when they renew their FAFSA form in future award years, and they will be considered independent for as long as they remain at the same institution and their circumstances remain unchanged.