New FAFSA live
The updated FAFSA form for students attending college in Fall 2024 is now live, although this is during a “soft launch” period where the website may intermittently be down for updates.
If families submit the form during this time, their information will be saved and provided to colleges in late January. If the new FAFSA is unavailable when families try to access it, the Department of Education advises families to simply try again later and says previously submitted information will be securely stored and not need to be re-entered.
Once the form is completed, families will receive an email confirmation along with their estimated Student Aid Index (SAI) and eligibility for federal Pell Grants. The SAI is the new term for what was formerly known as the Expected Family Contribution (EFC).
According to the FAFSA website, the Department of Education will send an email to families when their FAFSA information has been sent to the colleges and when they can access their FAFSA Submission Summary on StudentAid.gov. The FAFSA Submission Summary provides the official SAI calculation and federal Pell Grant eligibility.
The new FAFSA normally goes live on Oct. 1 each year, so it remains to be seen what impact this delayed launch will have on financial aid awards from colleges, and on the traditional May 1 decision date. Additionally, the new FAFSA has a calculation error that will result in families qualifying for less aid than lawmakers intended.
Major changes
Now that the new FAFSA is live, there are a number of major changes from previous versions.
Reduced benefit for having multiple students in college
FAFSA will no longer divide the SAI by the number of family members in college, which will significantly reduce the amount of financial aid for middle- and high-income families who have multiple family members enrolled in college at the same time. It will not affect low-income applicants who already have a zero student aid index
Divorced parents completing the FAFSA
Previously, when parents were divorced, the parent with whom the student lived with the majority of the time completed the FAFSA (and the other biological parent did not). That has now changed to which parent provides more financial support, regardless of where the child lives the majority of the time.
According to Mark Kantrowitz, current guidance issued by the U.S. Department of Education indicates that the parent with greater income is responsible for completing the FAFSA when both parents provide equal financial support to the student.
Small business exclusion going away
On the new FAFSA, the net worth of any small business or family farm is reported as an asset on the FAFSA. Depending on the value, this could significantly reduce the ability of certain families to qualify for need-based aid.
The net worth is calculated by subtracting business or farm debt from the current fair market value of the business or farm (including the value of land, buildings, inventory, equipment, machinery and livestock). To be considered a business or farm debt, the debt must be secured by the business or farm. If the debt uses something else as collateral, it does not offset the value of the business or farm.
Elimination of questions
A major goal of the new legislation was to simplify the FAFSA so more families would fill it out. The form has been reduced from 108 questions to under 40, including the elimination of questions asking about prior drug convictions and another requiring male students to register for Selective Service.
Pell Grant changes
The Pell Grant program is designed to help college be more affordable to lower-income students, and formula changes on the revised FAFSA will allow more to qualify. Students will now be able to determine eligibility for Pell Grants based on a lookup table without first having to complete the FAFSA. The changes make it easier for single parents to qualify for the maximum amount, and incarcerated students will once again be eligible.