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Changes to Federal Student Aid (FAFSA) 2023-24 and 2024-25 and How It Could Impact You

Changes to Federal Student Aid (FAFSA) 2023-24 and 2024-25 and How It Could Impact You

November 01, 2023

Deciding on which college to attend is an exciting time. Still, it can also be stressful. The Department of Education has been working to simplify the application process with a few modifications. Some of the notable changes for 2023-24 include:

  • Selective Service Questions – Due to changes in student eligibility for Title IV funding, the 2023-24 form no longer contains Selective Service Registration questions.

 

  • The Selective Service registration required male students under age 26 to enroll in the military draft. This was removed a few years ago as part of the FAFSA Simplification Act.

 

  • Drug Conviction questions – The form no longer contains drug conviction questions.

 

  • Sex, Race, & Ethnicity – The form will, however, add questions regarding an applicant’s sex, race, & ethnicity, which do not effect federal student eligibility.

 

  • Incarcerated students – Students who may be incarcerated in federal and state penal facilities will again be allowed to receive a Federal Pell Grant.

 

  • Pell Grant Modification – Federal Pell Grant lifetime eligibility will be restored to students who were enrolled in schools that closed while they were attending, or schools that mislead students.

 

  • Cost of Attendance (COA) – The changes provide a clearer picture of individual COA components, including:

 

  • Transportation expenses may include transportation between campus, residences, and a student’s place of work.

 

  • Institutions may no longer include loan fees for non-Federal student loans borrowed by students.

 

  • The costs of obtaining a certification, license, or first professional credential are no longer restricted to a one-time allowance. They are added to an institution's expenses in the COA for an incarcerated individual.

 

  • Specific expenses an institution includes in the COA for a student enrolled less than half-time have been expanded to include components not otherwise prohibited by the law. An example of this is an allowance for students in work related to a cooperative education program is permitted.

 

 

  • The language for some questions has been revised. For example, “tuition and fees” has been changed to “books, course materials, supplies, and equipment.”

 

The FAFSA Simplification Act is the overhaul of the processes and systems used to award federal student aid starting with the 2023-25 award year. Some of the changes required by law include:

  • Replacing the Expected Family Contribution (EFC) with the Student Aid Index (SAI) – In laypeople’s terms, how a school determines how much a student or family will need to pay for college will change. A newly devised “need analysis formula” doesn’t consider the number of family members in college and performs a separate eligibility determination for Federal Pell Grants (which records family size and poverty level). A student must demonstrate financial need through the FAFSA form to qualify for a Pell Grant.

 

  • Expanding Access to Federal Pell Grants – The Federal Pell Grant will be accessible to more students and will take into account family size and income (federal poverty level).

 

  • Streamlining the FAFSA Form – Data received directly from the IRS will be used to calculate Federal Pell Grant ineligibility and the SAI by way of the Fostering Undergraduate Talent by Unlocking Resources for Education Act (FUTURE Act). This allows the IRS to provide certain taxpayer information to the Department of Education for the purpose of administering certain federal student aid programs. The goal of this change is to:

 

  • Improve the experience by allowing the Department of Education to automatically obtain federal tax information for each applicant, parent, or spouse who provides consent.

 

  • Improve the integrity of the program for income-driven repayment plans and permanent disability discharge monitoring.

 

  • Enhance the experience of the 43 million customers of the Department of Education.

 

To learn about which FAFSA changes may impact you, consider consulting a financial professional who can review your current condition and help you create a strategy that aligns with your financial and educational goals.

 

This article was prepared by LPL Marketing Solutions

 

Sources:

FAFSA® Simplification Act Changes for Implementation in 2023-24 | Knowledge Center

What is the FAFSA Simplification Act? | Federal Student Aid

Fostering Undergraduate Talent by Unlocking Resources for Education Act Implementation Update (studentaid.gov)

 

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