The turbulence of COVID during 2020 has been enough for all of us, but did COVID make FAFSA easier? Does a pandemic make filing for FAFSA easier? Yes! We are most excited to hear about the simplification of the process itself. According to NerdWallet, “the high school graduating class of 2017 left $2.6 billion in grants on the table by failing to submit enough applications.” That’s A LOT of money not being used to educate our youth just because of crazy applications! So yes, let’s find the small silver linings of 2020 and rejoice that COVID initiated some changes for the better. Jeff Levy, an IEC at Big J Educational Consulting, summed up the biggest changes FAFSA will see.
- Changes will be effective starting July 1, 2023 for the 2023-2024 school year. The first redesigned FAFSA form will be available for high school seniors on October 1, 2022 for those students currently in 10th grade.
- The number of questions will be reduced from 108 to 36.
The term Expected Family Contribution (EFC) will be scrapped. It will be replaced by Student Aid Index (SAI). This is a positive change since many parents are currently misled into thinking their EFC is what they will have to pay when often it is significantly less.
- If a dependent student’s parents are divorced or separated and not remarried, the parent who provides more financial support to the student will be responsible for completing the FAFSA. “The parent you lived with more during the past 12 months” will be scrapped as the determining factor for which parent should complete the FAFSA. This closes an enormous loophole divorced or separated parents were able to exploit.
- Colleges will be required to disclose all elements of the cost of attendance on their website whenever it lists tuition and fees. This is a very positive change as some colleges continue to bury their total cost.
- Income Protection Allowance will be increased, allowing a greater amount of income to be sheltered from the financial aid formula.
- Asset Protection Allowance, which has steadily declined over the past decade, will remain unchanged and will probably disappear completely in a few years.
- The FAFSA will no longer divide the family assessment by the number of family members in college. This change will significantly reduce the amount of financial aid available for multiple family members enrolled at the same time, a harsh and regressive change from the current formula.
- The FAFSA will include a question about the applicant’s race or ethnicity.
- Charging a fee to complete the FAFSA will be prohibited.
- Male applicants will no longer be required to have registered with Selective Service.
- Applicants convicted of the sale or possession of a controlled substance will no longer be ineligible for federal student aid.
- Several changes to Professional Judgment and special circumstances, including prohibiting financial aid administrators from denying all financial aid appeals.
For a more in-depth look at the information above, check out the following link for more details –> Pandemic Relief Package Simplifies FAFSA
Is it perfect? No. But it is a step in the right direction. Let’s take advantage of the changes COVID has made to FAFSA and walk away from 2020 knowing that our future high school grads have options, better yet, opportunities.
** Update – 1/22/2021 **
Another great piece of information was uncovered in the recent FAFSA changes regarding grandparents gifting money to their grandchildren for college. Lynn O’Shaughnessy, a college finance expert, wrote a detailed report in the December issue of Forbes Magazine explaining several of the changes. Here is a quick synopsis explaining the recent FAFSA change for financial gifting from grandparents.
FAFSA change: grandparent giving
Making sure grandparent generosity doesn’t impact financial aid has always been tricky. Do it wrong and it can hurt a household’s chances for need-based financial aid.
The FAFSA overhaul will make it easy for grandparents or others outside the nuclear family to pay for college costs without jeopardizing aid. The FAFSA overhaul will ignore whether grandparents or other well-wishers have given money to a child to pay for college costs. The FAFSA will no longer ask this question.
When grandparents, aunts and uncles, friends or others outside the immediate family help with college costs currently, this money is treated as the child’s untaxed income which is assessed at up to 50% by the FAFSA formula. That is an outrageous penalty to pay.
This FAFSA change will be big deal for many generous grandparents!
Here is the link to the full article and interview: www.thecollegesolution.com/…
The college planning process can be stressful and Discover Pathwaze is happy to see that part of it just got a little easier. Please let us know if you need any assistance navigating the FAFSA. As always, we are here to help!