This is a segment of Bautis Financial’s college planning series, which includes webinars, podcast episodes, blog posts and downloadables to aid college-bound students and families in the admissions process. Visit our college planning hub for more valuable resources.
The most common concern we encounter when working with families is their ability to navigate the college admissions process. Prospective students and families struggle with weighing their many options, all while faced with the daunting task of finding a way to cover tuition and other college expenses.
When devising a plan, most families rely on a variety of resources to cover the ever increasing costs associated with college. One of the most common resources used is federal financial aid.
What Is The FAFSA?
The Free Application for Federal Student Aid (FAFSA) is a form completed by current and prospective college students in the United States to determine their eligibility for student financial aid. The government uses the data from this form to determine what federal grants and loans a family will qualify for in the upcoming school year.
Even if families don’t think they will qualify for federal financial aid, it’s important to apply anyway. Many colleges and universities will use the FAFSA’s data to determine a students financial package – including need-based and merit-based aid.
The New FAFSA Form
In December of 2022, President Biden signed into law the Consolidated Appropriations Act that included the FAFSA Simplification Act, which brought some sweeping changes to the FAFSA.
The intent of the changes to the FAFSA are to streamline and simplify the process. Before, it was a long application that involved families entering a tedious list of information from their tax returns. Now, this information will get automatically uploaded to the system, making the application much easier to manage.
In the past, this application was made available to apply for the upcoming school year in October of the prior year of intended attendance. Due to delays, the application will be made available for families to fill out on December 1, 2023. Even though there is a delay of when a family can apply, it is important to do so as early as possible – as some programs are available on a first come, first serve basis.
One of the other sweeping changes the FAFSA will experience will be the formula that will be used in determining a family’s eligibility. The old formula was the “Expected Family Contribution” which will get replaced with the “Student Aid Index.” Although the name has changed, the approach will be much the same: The government uses this index to assess a family’s needs. One of the positive changes to this new formula is the raising of the family income threshold, making more families eligible for federal need-based aid. This will expand eligibility for the Pell Grant program to more than a half a million students, and significantly increase those that are eligible for the max amount.
One of the unfortunate changes to the student aid formula is it will no longer include what was called a “sibling discount,” where the government would consider how many students in a family are going to college. Before, families would benefit from having multiple students in college at the same time and were awarded more aid. This will no longer be the case. With that said, many colleges will still consider this discount when assessing the aid their school will offer.
Begin your journey of mastering the college admissions process with Bautis Financial. Whether you’re a parent or guardian, student or school counselor, book a free consultation to discuss how our financial advisors can be a college planning resource.