info@teshley.com August 27, 2022 0 Financial Aid Paying for College

What’s New with the FAFSA?

Unless you can fully fund your child’s college education, no matter where you are on the college savings spectrum, changes are coming to the FAFSA that may upset your plans.

The FAFSA Simplification Act introduced many changes to the application and the program. Positive adjustments were made, e.g., a reduction in the number of questions and a slight increase in Pell grants. Pell grant eligibility also expanded.

KEY CHANGES

Reduction in the number of questions to less than 50
Maximum Pell Grant increased by $400
Expected Family Contribution (EFC) changed to Student Aid Index (SAI)
Subsidized Usage Limit Applies (SULA) repealed
Multi-Student “discount eliminated
Divorced/Separated Parents see a change in who files FAFSA

The Good News

In prior years, FAFSA consisted of well over 100 questions. The new FAFSA will have less than 50.

The Expected Family Contribution has changed to the Student Aid Index. The name change does not necessarily change the cost calculations; it just sounds less intimidating.

Incarcerated students that were previously barred from receiving aid are now eligible.

There has been a slight increase of $400 to the maximum Pell grant award, rising from $6,495 to $6,895.

That’s the good news.

The Bad News

Now for the not-so-good news, and this is where things get a little murky.

Subsidized Usage Limit – SULA has been repealed. At first glance, this sounds good but could propel students who need additional time to complete deeper into debt.

Multi-Student Families No Longer Receive Break

Parents with two or more children enrolled in college simultaneously will no longer receive a monetary benefit in 2023-2024. This falls under the “income protection allowance.” The overall IPA has been increased, so it remains to be seen what the final numbers will look like for multi-student families.

Divorced and Separated Parents Will See Filing Changes

Another significant change concerns divorced parents and which parent files the FAFSA. In the past, it has been the custodial parent. Under the new rules, it will be the parent with the highest income. A new spouse may also be required to include income on the application.

We’ve shared this overview so you can plan and make any necessary adjustments to your higher education plans.

We understand that there’s currently a petition circulating to remove the portion of the legislation about families with multiple students enrolled simultaneously. You can contact your members of Congress to express your concerns. Let them know how this change will negatively impact your family and your child’s future.

In addition to the changes that impact families with two or more students enrolled simultaneously, changes that affect divorced couples are also included in the legislation.

UPDATE: Read updated information on our FAFSA 2024-25 Rundown.

Be sure to subscribe to our new “Education Unpacked” YouTube channel to know when more in-depth content is available.

Links to the legislation and related articles by financial experts:

If you’d like to monitor changes, you can sign up for daily or weekly news releases from the Student Aid Knowledge Center daily or weekly news releases. The releases tend to be technical and can raise more questions than they answer.

Schedule your free consultation to discuss how these changes may affect you.