FAFSA Simplification Act
“FAFSA® Simplification Act: On Dec. 27, 2020, Congress passed the Consolidated Appropriations Act. The law includes provisions that amend the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act and includes the FAFSA Simplification Act—a sweeping redesign of the processes and systems used to award federal student aid. Specifically, the law makes it easier for students and families to complete and submit the Free Application for Federal Student Aid (FAFSA®) form and expands access to federal student aid.”
Key program changes
Key changes include, but are not limited to:
- Most of the changes related to FAFSA simplification will begin with the 2024-2025 application. Due to the changes, the 2024-2025 FAFSA will not be available as of the traditional October 1 date. The 2024-2025 FAFSA form will be available for students and parents by Dec. 31, 2023.
- The number of questions will be reduced, and the application will maximize the use of previously collected data.
- A student is referred to as the “applicant” and anyone else asked to provide information on the aid application—student’s spouse, student’s parent(s) and/or stepparents(s)—is called a “contributor” to the application.
- Everyone contributing to the FAFSA form online must have their own studentaid.gov account.
- Parents without a Social Security Number will be able to apply for an FSA ID.
- All students and contributors must provide consent to have their federal tax information transferred directly into the FAFSA form from the IRS via direct data exchange.
- The Estimated Family Contribution (EFC) has been replaced by the Student Aid Index (SAI).
- The FAFSA Simplification Act expands the Federal Pell Grant to more students and will link eligibility to family size and the federal poverty level.
- Schools will use the SAI to determine eligibility for federal financial aid programs. The University of Nevada, Reno will also use the SAI to determine financial need for need-based institutional and state funding.
- SAI will no longer take the number of students in college into consideration. This may reduce need-based aid eligibility for current students with siblings in college.
Terminology changes
- Contributor: anyone who is asked to provide information on the applicants FAFSA – student spouse, parent(s), and stepparent(s) for example.
- Consent: Applicants and contributors will now need to provide their consent to their Federal Tax Information (FTI) being included in the FAFSA, even if they did not file a U.S. tax return.
- SAI: Student Index Aid (SAI) replaces the Expected Family Contribution (EFC).
- FTI: Federal Tax Information (FTI) transferred directly from the IRS.
- DDX: Direct Data Exchange
FAFSA Simplification FAQs
View these common questions regarding the FAFSA Simplification Act.
FAFSA simplification changes include the first major redesign of the Free Application for Federal Student Aid (FAFSA) process in over 40 years, along with updates to the backend systems that process and store federal student aid application data. The goal is to make applying for federal student aid easier for students. FAFSA simplification implements provisions of the amended Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act and the FAFSA Simplification Act.
The benefits of FAFSA simplification include:
- a more streamlined application process,
- expanded eligibility for federal student aid,
- reduced barriers for certain student populations (e.g., homeless and unaccompanied youth, incarcerated students, English language learners, and students from low-income backgrounds), and
- a better user experience for the FAFSA form.
Significant changes to the application process include changes to the FAFSA form, how students and families complete the application, and the eligibility calculation.
- The FAFSA form will be updated and streamlined to improve access.
- The FAFSA form will be expanded to the 11 most common languages spoken by English learner students and their parents. Language-specific resources and support will also be available from FSA Information Center.
- The form will be consumer-tested with prospective first-generation students and families, as well as students and families from low-income backgrounds.
- The form will include new demographic questions about an applicant's gender and race/ethnicity.
- Foster, homeless, and unaccompanied youth-as well as applicants who cannot provide parental information-will be able to complete the form with a provisional independent student determination and receive a calculated Student Aid Index (SAi). Students who have their independent student status approved by a financial aid administrator will also be eligible for a renewal of their dependency status in subsequent years if their circumstances remain unchanged.
- Rather than importing their tax information using the IRS Data Retrieval Tool, applicants will consent to providing their Federal Tax Information (FTI) via a direct data share with the IRS. This enhanced data sharing simplifies the applicant's experience.
- Eligibility for federal student aid will be expanded in the following ways:
- Selective Service and drug conviction questions will be eliminated to reduce applicant barriers.
- New methodology will be introduced to calculate and determine applicant eligibility. The Expected Family Contribution (EFC) will be replaced with the Student Aid Index (SAi).
- The new need-analysis formula allows for a negative SAi calculation and implements separate eligibility criteria for Federal Pell Grants.
- Federal Pell Grant access will be expanded and linked to family size and federal poverty levels, which will allow more students and families from low-income backgrounds to qualify.
Federal Pell Grant access will be restored to incarcerated students under specific rules and programs.
FAFSA simplification will be implemented in phases. Certain changes began in the 2021-2022 Award Year and full implementation of major provisions will occur during the 2024-2025 Award Year.
You can view the full legislative texts at the following:
- FUTURE Act
- FAFSA Simplification Act (Division FF, Title VII of the Consolidated Appropriations Act, 2021)
Students who are not eligible for federal student aid due to not being an eligible citizen or non-citizen, will continue to complete the Universities “Institutional Methodology for FAFSA-Ineligible Students” Form (IM Form).
Note: The process for the Institutional Methodology for FAFSA-Ineligible Students Form (IM Form) will include some of the changes from the new FAFSA, both of which will be implemented for the 2024–2025 award year. The 2024-2025 IM Form is anticipated to be available in December 2023 and will continue to have a priority submission deadline of February 15.
The deadline is February 15, 2024.
While the FAFSA is typically ready on October 1, this year it will be ready sometime in December. It is required by law to be ready by January 1 at the latest. We know that is a long time to wait but we have adjusted all of our timelines on our end so that we can support you.
You can check our website for updates on when the form is ready. In the meantime, you and your family can get your FSA ID so you will be prepared to fill out the FAFSA.
All students will need an FSA ID. Parents need one, too. If parents file their taxes separately, then both parents need one. If parents file jointly, then they only need one between the two of them.
EFC and SAI are both numbers that colleges use to figure out how much financial aid you can get. EFC stands for Expected Family Contribution, and SAI stands for Student Aid Index.
EFC is based on your family's income and assets. SAI is based on your family's income, assets, and other factors, such as your zip code and your parents' education level.
While the words and the numbers are different - what is important to understand is that this number helps colleges determine your eligibility for different types of financial aid including grants, scholarships, loans and work-study programs.