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FAFSA System Enhancements

The Free Application for Federal Student Aid (FAFSA) serves as the gateway to higher education for millions of students each year. After a difficult two-year rollout of the newly simplified form, Federal Student Aid (FSA) made critical improvements to make the process easier and shorter to complete. Ultimately, these changes led to the FAFSA opening on September 24, 2025—the first time in history the form opened before October 1st.

The results so far have been promising: almost 60% of class of 2025 high school seniors completed the FAFSA, and NCAN is working to achieve an even better result this year.

History

Congress passed the FAFSA Simplification Act as part of the Consolidated Appropriations Act of 2020 to improve the federal student aid application process. The law achieved two of NCAN's primary goals:

  • Reduced complexity: Cut FAFSA questions from 108 to a maximum of 36
  • Earlier Pell awareness: Introduced a new method for determining Pell Grant eligibility, allowing younger high school students to learn whether they'll qualify for need-based aid and making college feel more attainable.
These changes expanded Pell Grant eligibility, increasing the number of students qualifying for Pell and the maximum award, and restoring eligibility to incarcerated individuals.

However, implementation proved challenging. The simplified 2024-2025 FAFSA didn't open until January 1, 2024, and faced numerous technical glitches, limited access for contributors without Social Security numbers, and processing delays until March 2024. These issues delayed financial aid notifications and enrollment for Fall 2024, resulting in a 9% drop in FAFSA completion between the classes of 2023 and 2024.

FSA responded by bringing in outside experts in summer 2024 to address technical issues. While the 2025-2026 form still opened late, in November of 2024, improvements included enhanced technology, beta testing, and permanent staff additions to oversee the FAFSA.

Moving Forward

NCAN welcomes the progress on simplification and enhanced technology. We recommend that FSA make the following additional improvements to boost completion rates.

  • Streamline the Renewal Process: Develop a renewal FAFSA requiring only updated consent for the annual IRS data transfer and essential field updates.
  • Expand Automated Data Transfer: Establish automated IRS data transfer for individuals who file federal tax returns with an ITIN, eliminating manual income entry.
  • Improve StudentAid.gov Account Setup:
  • Automate identity verification when establishing accounts
  • Reduce mandatory fields and steps
  • Enhance account recovery after identity theft by authorizing FSA to delete or flag fraudulent accounts
  • Strengthen Early Awareness Tools: FSA should create a simple Pell Grant eligibility predictor using only family size and adjusted gross income—eliminating the need to complete the full Financial Aid Estimator.

Proposed Technical Amendments

We also recommend that Congress make specific legislative language changes to improve eligibility and student aid determinations:

  • Stop requiring independent students (age 24+ or married) to answer all dependency questions
  • Allow individuals under 24 who are separated or divorced to be considered independent
  • Reinstate the student housing choice question
  • Allow applicants to enter family size directly and revert to the previous household size definition
  • Allow alternate SAI calculations for enrollment periods other than nine months
  • Add EITC values from IRS data as an imported field

Verification: Streamlining Success

The IRS data transfer has dramatically reduced income verification burdens: selection rates have dropped to low single digits. This allows faster financial aid notifications and more timely disbursement of aid.

NCAN will continue monitoring federal policy related to FAFSA and student aid programs. Simplification is working: more students are completing the FAFSA and accessing the aid they need.