This is directed to families with multiple college students still enrolled in 2024-25.
The preliminary case studies from the National Association of Financial Aid Administrators for the new Student Aid Index (SAI) formula are out. This is the final phase of the implementation of the FAFSA Simplification Act of 2021.
Eliminating the multi-student discount is about to become a reality for thousands of families in the United States with college-age children.
The impact on these families is not good. Some would deem it devastating.
BONUS: For background information and in-depth understanding of the new FAFSA, after reading the full blog post, view our “How Will the Changes to FAFSA Impact You?” on our Education Unpacked YouTube Channel. College financial expert, Robert Falcon founder of College Funding Solutions provides details and guidance for parents/students.
A Case Study
Let’s examine the presented case study.
In the scenario, a family with three students has an SAI that is more than triple compared to the previous school year, and the student does not qualify for a Pell grant.
In 2023-24, under the old formula, the Expected Family Contribution (EFC) is $5,600. The new SAI calculation comes in at $18,400 per student. Yikes!
The full NASFAA case study report is available online. The referenced multi-student example appears on page 3.
This is just one example. Others will follow. It remains to be seen how far-reaching the negative impacts will be on students and their families.
An Explanation for the Change
Some people argue that this new system is just because families that pay for students who don’t have overlapping attendance years never receive a discount.
Here’s a quote from an “Inside Higher Education” article related to the subject:
“Families with more than one kid in college right now are going to see this change as very unfair, but I think there’s a good argument to be made the other way—that the current treatment where if you have more than one kid in school at the same time is not fair. Because if you have two kids four years apart, you pay twice as much, but if you’ve got twins, you get this discount.”
This is a narrow and not entirely accurate view of a complex matter that doesn’t lend itself to a completely equitable conclusion. It ignores the additional time parents have to plan, earn and save for the final years of the younger students. Parents of multiples must shell it out simultaneously, or the students are forced to borrow.
For example, any salary increase(s) received must be split over the number of students enrolled. In contrast, those with only one at a time can apply the entire raise to tuition over a longer period. Of course, this example also has its shortcomings.
When looking at the broad range of families, the best that can be achieved is a reasonable balance.
For decades, receiving a “discount” for multiple college students enrolled simultaneously has been the policy. Families have planned and budgeted with this benefit as part of their cost calculations. It’s not being phased out; it’s being instantly eliminated -with little time to make budgetary adjustments.
The reason behind eliminating the split for the number of students enrolled isn’t apparent. The impact is crystal clear – students and their families must make tough choices quickly.
Remember that the FAFSA is filed a year ahead of the year of attendance. New and returning college students will file the 2024-25 FAFSA in the fall of 2023.
Will institutions adjust their final aid awards to retain students and keep payments within acceptable limits for the average family?
We’ll be back later with a look at the positive impacts of the final phase of the FAFSA Simplification Act.
Until then, use this information to make new calculations and budgets. Consider good schools with a cost-of-attendance that fits your budget and apply for additional scholarships.
If you’ve been following the news or watching our YouTube channel, you know that the implementation of the FAFSA Simplification Act is underway.
As previously discussed, many of the changes in the legislation are steps in the right direction to make college less of a financial burden (notice we didn’t say affordable) on students and their families.
It’s the loss of benefit for having multiple students enrolled in college simultaneously. This benefit can range from $3,000 to $12,000 depending on the number of students and the school(s) they attend.
Under the new rules, families will lose this benefit.
How this will impact families has been explained with scenarios in multiple published articles. You can read one example here. Yet, it appears that many families and even some high school guidance counselors must be made aware of the upcoming changes to aid.
Remember that filing the FAFSA is always one year ahead, i.e., this year’s high school seniors will file the 2023-24 FAFSA starting October 1, 2022. The FAFSA 2024-25 application will open on October 1, 2023.
With just a year to go until these changes take effect, there isn’t much time to get Congress to reverse course, but it may still be possible.
What can you do?
- Write to your congressional representatives – all of them
- Sign the petition on chang.org
There are no guarantees that the first two efforts will produce the desired results, but they are worth a try.
In the meantime, you can adjust your budgeting to reflect the enactment of the changes. Check with your child’s prospective or current schools to see if they offer a multi-student credit.
We understand that some schools requiring the CSS profile will continue to offer some form of benefit to families.
UPDATE: The U.S. Department of Education has announced that the release of the new FAFSA will be delayed until December.
For an overview of additional changes to the FAFSA, see our FAFSA 2024-25 Rundown post.
We’ll have a new post when we learn of new developments. Remember to subscribe to our “Education Unpacked” YouTube channel for sister content.
Do you have questions about the new FAFSA? Schedule your free 15-minute consultation.
As a Newbie, I am continuously exploring online for articles that can aid me. Thank you
Thank you.
We are monitoring the situation for the fall. Will provide updates in the near future.