1. The application wasn’t available until December 2023.

While the form typically debuts in October with award letters coming out as early as December, in 2024 the updated FAFSA did a soft launch in December, allowing administrators more time to adapt to the many changes. Despite the extra time, the new FAFSA rollout has been plagued with snafus.

Undersecretary James Kvaal said the department plans to begin sending students’ FAFSA information to colleges “in batches in the first half of March.” This is nearly two months later than the late-January timeline originally anticipated.  With no guarantee of this, students and their families are worried it could be as late as April or May for colleges to receive FAFSA information. Without that information, colleges are not able to provide financial aid offers allowing families to make an informed decision on which college makes the most (financial) sense for their child.  And even if they do receive an aid package before the typical May 1st decision deadline, the window will be significantly narrowed as compared to past years. Those pursuing early decision, where the decision deadline is typically by mid-February, have had their window completely obliterated. The hope is colleges will push their acceptance deadlines out to provide more time to weigh options. 

2. The application has been greatly reduced from 100+ questions to 36.

The changes to FAFSA are a part of the FAFSA Simplification Act, and they weren’t mincing words! Questions that were commonly deemed confusing were eliminated. As well as certain disqualifying questions, such as ones related to past drug charges. Students and their parents have already reported the FAFSA being materially easier to fill out compared to years past.


3. The wording and calculation for how financial aid is determined has changed. 

In the past, you may have heard of the Expected Family Contribution (EFC) calculation. That’s now being replaced with the Student Aid Index (SAI). The reasoning is that families thought the EFC was calculating the total amount due, but ultimately a college doesn’t have to adhere to this calculation. It was used to create an aid package to bridge the gap between the calculated family contribution and the sticker price, which could of course include loans. 

The changes to the calculations are material:

  • The most noticeable difference from the prior EFC calculation may be that the number of family members in college is removed from the calculation. Having two or more students overlap was beneficial in demonstrating increased financial need in the past, but it will now have no bearing.
  • Grandparent 529 plans will not factor into the calculation, also a big change! Payments from these plans had shown up as income in the following year’s application, which could cause you to lose aid. But now they are not reportable.
  • It allows a minimum SAI of -$1,500, whereas before it was $0. This means the lowest income student could actually receive a cushion to apply toward related costs not typically funded by financial aid.
  • Adding more to your employer-sponsored retirement plan can now improve your SAI. But this is not the case for self-employed workers or business owners, who are among the most disadvantaged from calculation changes. In the past, small business owners didn’t need to report their business as an asset. Now they must. And because of this, they must also figure out a way to value the business which will be verified by FAFSA – so no guessing or lowballing.
  • In the past, paying state taxes could lower your reportable income. This has been eliminated, which is a bummer for those living in high-tax states.
  • If a child’s parents are separated or divorced, only the income and assets of the parent who provided the most in support 2 years prior is used in the formula under SAI. 
  • The allowable amount a child can keep as non-reporting earnings (think summer job) increased from about $7,000 to $9,400.

4. Expanding Access to Federal Pell Grants

  • Federal Pell Grant are now available to more students by linking eligibility to family size and the federal poverty level.
  • Federal Pell Grant lifetime eligibility is restored to students whose school closed while they were enrolled or if the school is found to have misled the student.
  • Incarcerated students in federal and state penal facilities have regained the ability to receive a Federal Pell Grant.

5. Creating Efficiencies on the FAFSA Form

Most families should be able to use data received directly from the IRS to calculate Federal Pell Grant eligibility and the SAI. This is a lot less data entry for the applicant, and hopefully less room for error.