The FAFSA Simplification Act was enacted into law as part of the Consolidated Appropriations Act in 2021 with the goal of streamlining the process through which students apply for financial aid. These changes are being implemented for the Free Application for Federal Student Aid (FAFSA) that students will use to apply for financial aid for the 2024-25 academic year and have resulted in the application being delayed until December 31, 2023.
What’s Changing With the FAFSA?
There are a number of benefits of the FAFSA simplification act, including a more streamlined application process and a better user experience for the FAFSA, expanded eligibility for federal student aid, and reduced barriers for certain student populations (e.g., homeless and unaccompanied youth, incarcerated students, English language learners, and students from low-income backgrounds).
There was a significant reduction in the number of questions in the form from 108 questions to approximately 46 questions.
Previously, users had the option to enter their tax information manually or use the IRS Data Retrieval Tool. Beginning with 2024-25, all persons on the FAFSA must provide consent for the Department of Education to receive tax information or confirmation of non-filing status directly from the IRS. Regardless of whether they file a US tax return, all students, parents, and spouses must check a box that grants the IRS permission to transfer any data they have directly into the FAFSA form. All parties whose Federal Tax Information (FTI) is included on a student's FAFSA form must consent annually. If no information is on file with the IRS, specific codes will be sent indicating that person’s status with the IRS. All contributors providing information on the form must grant permission, or the student will not be eligible for federal student aid. Transferring data directly from the IRS is expected to significantly reduce federal verification requirements and requests for additional documentation.
A contributor—a new term being introduced on the 2024-25 FAFSA—refers to anyone who is required to provide information on a student's form (such as a parent/stepparent or spouse). Each contributor needs an FSA ID (basically a username and password) in order to log in to the application and complete the appropriate section. All contributors will have their own sections that can only be accessed and completed by them. There is one exclusion: if two contributors are married to each other and filed a joint return, only one contributor needs to secure an FSA ID and complete the FAFSA. The last contributor completing a section of the FAFSA will be permitted to submit the application.
Contributors will receive an email informing them that they've been identified as such, and will need to log in using their own FSA ID (if they don't already have one) to provide the required information on the student's FAFSA.
Being a contributor does not mean they are financially responsible for the student's education costs, but it does mean the contributor must provide information on the FAFSA or the application will be incomplete and the student will not be eligible for federal student aid.
Students will be prompted to list the email addresses of other required contributors such as parents on the FAFSA application.
The Student Aid Index more accurately describes the number used to determine aid eligibility and, unlike the EFC, the SAI may be a negative number down to -1500.
Previously, the FAFSA calculated the number of household members attending college into the EFC, dividing it proportionately to determine federal aid eligibility. Beginning with the 2024-25 FAFSA, the application will still ask how many household members are in college, but your answer will not be calculated into the SAI. As such, some students with siblings in college may see a change in their federal aid eligibility.
When students log in, they can only access student questions. When a parent or spouse logs in, they will only have access to questions about their role. Only when the final contributor finishes their section will the form be able to be submitted.
Family size is based on federal tax information (FTI) transferred directly from the IRS to the FAFSA via the FUTURE Act Direct Data Exchange (FADDX). This means the number of dependents in the family size is now based on the number of individuals who are claimed as dependents on either the applicant’s (if independent) or parent’s (if dependent) U.S. federal tax return. If the family size has changed since filing the 2022 tax forms, a family size question will allow for reporting the updated family size. However, the contributor cannot see what family size was reported from the IRS Direct Data Exchange, as the transferred FTI is masked.
Therefore, will only need to be reported for those families required to report assets. Child support paid out of the household is no longer a question on the form.
For dependent students, financial information was previously needed from the parent(s) the student had lived with the most in the last 12 months. With the new FAFSA, financial information will be required from the parent(s) who provided the most financial support to the student.
Families with an adjusted gross income above $60,000 or specific schedules must report assets. There are no exemptions for reporting net business or family farm value. If the family farm includes the principal place of residence, applicants should determine the total net value of all farm assets and subtract the net value of their principal residence to determine the final value of their farm assets. Some current FAFSA filers may see an increased SAI due to the inclusion of all business or farm net values, even with no income changes.
As usual, the FAFSA will ask for each contributor to report the value of cash, savings, and checking accounts, and investments. 529 accounts still count as parent assets, but parents will only need to report the value of a 529 account for the student, and no longer need to report the value of 529 accounts for any other children.
After submitting the FAFSA, a student will receive a FAFSA Submission Summary (FSS). Previously called the Student Aid Report (SAR) the FSS compiles all of the information submitted on the FAFSA and also provides the student's SAI.
Students who don't qualify as independent but aren't able to provide their parent(s)' information on the FAFSA due to unusual circumstances can still submit the application and will be given provisional independent status. Any student with this status will need to provide additional information to the Financial Aid Office to verify this status and be declared officially independent.
Any incomplete FAFSA will expire and disappear after 45 days, which means the form will need to be restarted after those 45 days have passed. Contributors who have not completed their sections will receive a reminder every 7 days to do so.
Federal Student Aid Webinars
Federal Student Aid has released a series of educational webinars related to recent changes in federal aid including the 2024-2025 FAFSA. You can view these videos on their YouTube channel.
The webinar below shows a prototype of the 2024-2025 FAFSA for dependent students.
How to Prepare for the FAFSA Becoming Available by December 31, 2023?
It is strongly recommended that all contributors sign up for their FSA ID before completing the FAFSA. You may not be able to complete the FAFSA on the same day that you set up your FSA ID.
- Have your 2022 federal tax documents easily accessible in December when the 2024-25 FAFSA is available.
- Be sure you and your parent(s) have an FSA ID
- Students and all contributors must register for an FSA account, known as an FSA ID, to complete and sign the online 2024-2025 FAFSA.
- All contributors are encouraged to create the FSA ID as soon as they are able to.
The information you provide during the creation of an FSA ID needs to be matched with the Social Security Administration, which can take up to several days.
What you’ll need when creating an FSA ID:
- Social Security Number
- Mobile phone number
- Personal email address (do not use a school email, since a school email may become inactive after graduation).
How to Create an FSA ID
Coming Soon: FSA ID Creation Process for Users Without an SSN
The ability to create an FSA ID has historically been limited only to parents who can be verified with a Social Security Number. However, starting in December, all parent and spouse contributors without a SSN may now create one using the Department of Education's newly developed system to validate identity. Further guidance for using the updated FSA ID process is anticipated in December.
The new FSA ID process for those without SSNs will launch on the same day as the 2024-25 FAFSA (December 31, 2023). When the updated process launches, it will require everyone (if you currently have an FSA ID or are just creating one) to have an email address. The set-up process will act very similarly to the current steps and ask people to include their demographic information. The main difference is that they will click a box indicating they do not have a SSN. To help with the identify verification process, the person will be asked up to four knowledge-based questions provided by TransUnion, the consumer credit reporting agency. These questions may be items such as a previous address, phone number, former employers, loan amount, etc. If the person correctly answers the questions, their FSA ID will be verified immediately, and they can move directly into completing the FAFSA online.
Individuals who do not provide correct answers on the first attempt will receive an email with instructions for an alternative method to complete their identify verification. That process will require them to complete an attestation form they will be able to access from the email. Individuals will also be directed to contact the FSA Information Center to initiate the identity verification process, which will result in a case number sent via email and further instructions for submitting the attestation form and a copy of the items listed below via email.
Submit one of the following forms of current ID:
- Driver’s license or
- State or city identification card or
- Foreign passport
OR submit a utility bill and one of the following:
- Municipal identification card or
- Community ID or
- Consular identification card
Within one-to-three days of submitting the proper documents, FSA will send an email confirming that the identity has been verified.
2024-2025 Federal Student Aid Estimator Tool
The Federal Student Aid Estimator provides students and families an estimate of their 2024-2025 federal financial aid using the new Student Aid Index (SAI).
Please note: This is not a FAFSA. Students will need to complete a 2024-2025 FAFSA when it becomes available by December 31, 2023.