By Catherine Brown, Senior Director of Policy and Advocacy
Reading time: Four minutes
National College Attainment Network (NCAN) members know that the Free Application for Federal Student Aid (FAFSA) is a critical tool for students looking to receive financial aid for college and that is has been notoriously complex and a barrier
for many students, particularly those from low-income backgrounds or those who are first-generation college students. While the delay in the release of the new form (slated now for December) has gotten a great deal of attention, changes are coming
to the FAFSA that could make it easier for students to complete the form and receive the financial aid they need to attend college. Here are the top five improvements to the FAFSA that you can expect starting with the 2024-25 award cycle:
Expansion of Pell Grant Eligibility: One of the most significant changes coming to the FAFSA is the implementation of the Student Aid Index (SAI), which will increase the pool of students who are eligible to receive a Pell Grant.
Under the SAI, the maximum Pell Grant will automatically become available to students from households earning less than around twice the federal poverty level for their household size. The new formula also exempts applicants from households with up to $60,000 in income from having to report assets and introduces a negative SAI to convey to financial aid administrators the students with the greatest
financial need. While there are different estimates for how many additional students will become eligible, there is broad agreement that the simpler formula will result
in fewer Pell Grants Left on the Table.
Transparency in Pell Grant Eligibility: The change above will be enhanced by a new resource called the Pell Lookup Table, which Federal Student Aid (FSA) will release by May 2023. The Pell Lookup Table will allow students and counselors to easily ascertain whether a student meets the criteria for receiving a minimum or maximum Pell Grant based on their
adjusted gross income and household size. This useful early awareness tool will allow students and families to better plan for college by knowing how much federal student aid they are likely to receive that does not have to be paid back.
FSA ID for Contributors without Social Security Numbers (SSNs): Parents and legal guardians without SSNs will be able to obtain an FSA ID starting this year. Previously, people in this situation had to mail their application and have
it matched with their child’s manually, a slow and inefficient process that applicants sometimes had to repeat multiple times. The new process, which will be unveiled in August, will allow contributors who do not have SSNs to obtain an FSA ID,
and will be fully electronic. Contributors will have their identity verified through the TransUnion Credit Bureau, or, if they do not have documents in that system that can be used to verify their identity, they will be able upload their documents
to the FSA website. The manual process is being retired.
Reducing Verification Through Data-Sharing with the IRS: The Better FAFSA will directly import all the income information from the IRS, eliminating the need for certain applicants to go through an arduous process of confirming that
they do not file taxes by requesting separate documentation from the IRS. Automating the process of inputting income data will reduce errors and cut down on the need for verification, which can be a time-consuming and stressful process for students
and their families that inhibits students from receiving federal student aid. Prior to the COVID-19 pandemic, half of Pell Grant-eligible students were flagged each year to
prove the information they provided on their FAFSA was accurate and more than a quarter of Pell-eligible students did not receive federal student aid because they were not able to get through the verification process. These enhancements to the
FAFSA should make verification less widespread and burdensome for students.
Easier Process for Achieving Provisional Independence: Applicants in foster care, students experiencing homelessness, those whose parents are incarcerated, and other students in difficult circumstances will be able to complete the
FAFSA more easily once the Better FAFSA is unveiled. By indicating on the form that they face unusual circumstances, students will
be granted provisional independent status and be able to complete the FAFSA without providing parental information. This change will put Pell Grants and other federal student aid in reach for many students in difficult circumstances.
Overall, the changes coming to the Better FAFSA are a positive step forward for students and their families. By expanding Pell Grant eligibility, building early awareness, allowing people without SSNs to receive an FSA ID, and improving the verification
process, more students will be able to complete the form and receive the financial aid they need to attend college. These changes are an important step towards making college more accessible and affordable for all students.
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