More Changes Coming to FAFSA

The FAFSA Simplification Act of 2021 brings a slew of changes to the FAFSA that will begin with the 2022-23 application cycle (when current sophomores are seniors). These changes won’t take effect for over a year, but families should be familiar with these changes while considering the four-year cost of college.

Families will no longer see a benefit from having more than one student in college at the same time.

Currently, a family’s expected contribution is divided by the number of children in college. As of 2022, this benefit goes away. This loss will reduce the amount of need-based aid that middle and high-income families with multiple family members enrolled in college can expect.

The parent who contributes more financially to a student’s upkeep will be the one whose income is considered once the new law goes into effect.

Currently, students whose parents live separately submit information for the parent with whom they live a majority of their time. 

The Expected Family Contribution (EFC), or the number calculated by FAFSA and provided to colleges as a way for them to determine demonstrated need, will change to Student Aid Index.

Demonstrated need is currently calculated by the total cost of attendance minus the expected family contribution (EFC). .Because most colleges do not meet 100% of demonstrated need, the EFC misled families into thinking that this number was what they would actually pay for a year at college, but most families paid more than the EFC and were expected to provide more funds from assets or through student/parent loans. The name Student Aid Index better reflects what the number represents.

Also, the new legislation shortens the number of questions from about 100-plus questions to 35, which will hopefully encourage more families to complete the FAFSA. Pell Grant-eligible students will see another change—lower-income students may find it easier to determine how much Pell money they can expect earlier in the process with the new FAFSA.