You might have heard big changes are coming to the FAFSA with the Consolidated Appropriations Act. If you have a student going to college starting with the 2023-24 school year (i.e. filling out the FAFSA starting October 2022), this is very important information to understand. Why? The FAFSA is the starting point for crucial financial aid for your son or daughter. In fact, I’ve seen quite a few financial aid letters where federal financial aid makes or breaks a student’s ability to attend college. Crucially, a few of the changes could have a major impact on your eligibility for federal financial aid. Here is a summary of the main changes:
The FAFSA will be easier to complete.
Can I get an amen? The new FAFSA will have fewer questions and an improved user interface. This is a welcome change, as any modification that makes the form easier is beneficial for families working hard to afford college.
Expected Family Contribution is gone; hello “Student Aid Index”
EFC for SAI? I’m not sure if financial aid professionals will abbreviate Student Aid Index as much as they did Expected Family Contribution, or EFC, but this measure will be just as important as the old one. The name change reflects that the result of the FAFSA is essentially a financial ranking system, or index, not an indicator of what a family will actually have to pay to go to college or receive financial aid.
Financial aid program modifications
These are the most important changes both in terms of how your family is ranked and the amount of aid dispersed. Specifically, a few financial aid categories will get a boost. On the grant side, more families will qualify for the Pell Grant, one of the government’s most generous aid programs. On the loan side, the limitation on lifetime subsidized loan eligibility was repealed. Unfortunately, families with multiple children in college will no longer get a “discount” in their FAFSA calculations. This could be a huge hit for families falling under this scenario.