Kristen BixbyChanges to the Free Application for Federal Student Aid (FAFSA) are on the way! With the passing of the Federal pandemic relief legislation in December, Congress also approved several updates to the FAFSA effective with the 2023-2024 academic year. Tucked into the nearly 6,000 pages of the Covid relief bill were many associated with the financial aid system. There is some good news in there such as the removal of many confusing questions on the FAFSA. There are also many changes that will directly affect the methodology used to determine a family’s financial aid eligibility. Let’s explore some of the changes expected to have the greatest potential impact on families:
Having multiple children enrolled in college at the same time will no longer reduce your expected contribution. The legislation eliminates the current discount that families receive when they have more than one child enrolled in college concurrently. Without this discount, families may see their contributions double or in some rarer cases triple depending on the number of children in college. Suppose your twins are starting their freshman year in college during the Fall 2021 semester and your expected contribution is $20,000 for the academic year. With these changes, your expected contribution would double to $40,000 starting in the 2023-2024 year.
The student’s custodial parent is no longer the default parent to complete the FAFSA. Currently, the student’s custodial parent is responsible for providing their data to complete the FAFSA. The new legislation stipulates that the parent who provides the most financial support completes the FAFSA. If both parents provide an equal amount of support, the FAFSA would need to be completed by the parent with the higher adjusted gross income (AGI).
There are other changes to the form that have less of a direct impact on families including changing the naming convention of the Expected Family Contribution (EFC) to the Student Aid Index. Although the intention of this is good, our initial take is that one naming convention is simply being swapped for another. The new FAFSA form will contain fewer questions than in previous years; however, the questions set for elimination did not apply to 99% of filers.
Needless to say, some of the changes coming down the pipeline could have a major effect on families and also shift the awarding practices of colleges. It’s important to start preparing for some of these changes now, especially if you expect to have more than one student enrolled in college during 2023 and beyond. Projecting cost and planning accordingly is important for many families as they do their search. Your 2021 federal taxes will be used to complete the 2023-2024 FAFSA, so your decisions today have a direct impact on your financial aid future. Now is a great time to think about how these likely changes will affect your ability to pay for your child’s education and to start budgeting for the extraordinary cost of higher education. There’s a lot of details to this. At Campus Bound, we can help prepare you and your family for the uncertainties of planning for these changes and explore their direct impact on your specific situation.