FAFSA Simplification Act
The FAFSA Simplification Act was enacted into law as part of the Consolidated Appropriations Act in 2021 with the goal of streamlining the process through which students apply for federal student aid. These changes are being implemented for the 2024-25 FAFSA form and beyond. The FAFSA for 2024-25 is expected to open in December 2023. Student will be notified when an actual opening date is released.
The FAFSA Simplification Act also significantly amended the formula that calculates how students qualify for the federal Pell Grant.
Below are resources to help you understand these changes.
- Significant reduction in the number of questions for applicants (and parents) reducing the number of questions from 108 to 46.
- Students can add up to 20 colleges to the FAFSA form.
- All parties required to provide information on a student’s FAFSA are now called contributors, this includes students, spouses, parents and step-parents.
- Regardless of whether a contributor (see above) is required to file a U.S. Tax Return, each contributor is REQUIRED to provide consent for the IRS to transfer tax data through the Direct Data Exchange (DDX) for the required tax-year (always two-year prior tax information, ex. 2022 tax information for the 2024-25 FAFSA) to the FAFSA form. A student’s FAFSA will not be processed, if all contributors have not checked the consent box on the FAFSA form
- FAFSA login will be based on whether the user is a student or another contributor. Only questions for that contributor will be displayed when logged in.
- Family size will be based on the number of tax exemptions claimed on the tax form(s) transferred into the FAFSA, from the required tax-year. If the family size has changed since the required tax-year, a family size question will allow for reporting the updated family size.
- Child support received has been moved to the asset section of the form and, therefore, will only need to be reported for those families required to report assets. Child support paid out of the household is no longer a question on the form.
- Demographic questions regarding race, gender, and ethnicity are asked for Department of Education research purposes only, and will not be used to determine a student’s aid eligibility. Students will have the option to decline to answer these questions. Parents will not be able to view the answers to these questions, and they will not be included in the FAFSA Submission Summary.
- In the case a dependent student’s parent(s) are not married or living in the same household, the parent who provides the student with the most financial support will be included on the FAFSA form. This will no longer be determined by which parent the student lived with the most throughout the year.
- There will be two-step verification, and all FAFSA contributors must have an FSA ID to log into the online form.
- A new process for parents and spouses without a social security number will be added to the FSA ID site. This will allow them to electronically sign an application, rather than send in a paper application.
The FAFSA application is expected to open in December of 2023. Students will be notified when an actual open date is released.
Create an FSA ID!
All contributors (students, spouse, parent(s), or step-parent) will be required to have an FSA ID to electronically sign the FAFSA form. You can prepare by creating an FSA ID now by clicking here, so it is ready when the FAFSA opens in December 2023.
Beginning with the 2024-25 FAFSA form, the Expected Family Contribution (EFC) will be replaced with a Student Aid Index (SAI).
- The formula for calculating the Student Aid Index (SAI) is:
- Estimated Cost of Attendance (COA) – Student Aid Index (SAI) = financial need
- • The new need-analysis formula:
- Removes the number of family members in college from the calculation
- Allows a minimum SAI of -$1,500
- Implements separate eligibility determination criteria for Federal Pell Grants based on federal poverty levels and family size
- Child support received will be included in assets and not as untaxed income.
- Families who own a small business/farm that also serves as primary residence will now have assets of that business/farm considered in their need-analysis calculation.
The California Dream Act Application (CADAA) allows undocumented AB540 eligible students interested in attending eligible California colleges, universities, and career education programs to apply for state financial aid.
The California Student Aid Commission is also expected to make changes to the 2024-25 CADAA, however detailed changes are not available at this time.
The CADAA for 2024-25 is expected to open in December 2023, the same date as the FAFSA. Students will be notified when an actual opening date is available.
The priority deadline for Cal Grant has been extended to April 2, 2024, for FAFSA and CADAA filers. But remember, if you are attending a California Community College, like Saddleback, you have until September 2nd to secure your Cal Grant funding.