The FAFSA for 2024-25 has been simplified. Learn about key changes and how they affect financial aid eligibility.
The Free Application for Federal Student Aid — commonly known as the FAFSA — has been extensively redesigned for the 2024‒25 school year. This new, simplified version will be delayed until December, offering a shorter application with just 46 questions instead of the previous 108. These changes will significantly impact financial need calculations for students across different income levels.
FAQs
Q1: Why is the FAFSA opening delayed this year?
A1: The new simplified FAFSA will open in December instead of October due to extensive redesigns aimed at making the application process more efficient.
Q2: How does the new student aid index affect financial aid?
A2: The student aid index replaces the expected family contribution, focusing on measuring financial aid eligibility rather than determining family payments.
Q3: Will families with multiple college students receive less aid?
A3: Yes, the removal of reduced parent contributions for families with multiple college students may decrease aid eligibility for some families.
Q4: What changes have been made to Pell Grant eligibility?
A4: Pell Grant eligibility now considers family size and federal poverty levels, expanding access to more students.
2024‒25 FAFSA Redesign Implications
The Free Application for Federal Student Aid — commonly known as the FAFSA — has been extensively redesigned for the 2024‒25 school year.
Because of the changes, the new FAFSA won’t open as usual on October 1st this year but will be delayed until December.
The new, simplified FAFSA is much shorter — down to 46 questions from 108 — and contains a number of changes that will affect the calculation of financial need for low-, middle- and high-income students.
2024‒25 FAFSA Key Changes
A new “student aid index” will replace the current “expected family contribution” terminology. Think of the student aid index as a yardstick measuring a student’s financial aid eligibility, rather than how much a family will pay.
For parents with multiple children in college at the same time, the new FAFSA will no longer provide an advantage in the form of a reduced parent contribution.
The current FAFSA divides the parent contribution by the number of children in college, but the new FAFSA does not.
This change has the potential to significantly decrease aid eligibility for middle- and high-income students
Cash support and other money paid on a student’s behalf, for example a gift of money from a relative or a distribution from a grandparent-owned 529 plan, will no longer need to be reported.
The income protection allowance, which shields a portion of income from consideration, will increase by 20% for parents and by 35% for most students.
The new FAFSA will expand Pell Grants to more students, and will link eligibility to family size and the federal poverty level.
The current IRS data retrieval tool will be replaced by a new IRS direct data exchange tool, which will now be mandatory.
As a reminder, the 2024-25 FAFSA will use income information from an applicant’s 2022 federal tax return
Preparing For FAFSA Changes And College Financial Planning
The redesigned FAFSA for the 2024-25 school year introduces significant changes that simplify the application process while altering how financial need is calculated. These updates aim to make federal student aid more accessible and equitable.
Students and families should prepare for these changes ahead of the December opening by reviewing their financial situations and understanding how these modifications may impact their aid eligibility.
These are just some of the new changes to the FAFSA. For pro tips, visit the federal student aid website.
Contact your tax and financial advisors to determine the best moves for your situation.