The US Department of Education (ED) announced on Tuesday that it will update the supporting data tables
used in the Student Aid Index (SAI) calculation to account for inflation for the 2024-25 Free Application for Federal Student Aid (FAFSA) award year, giving students access to an additional $1.8 billion in need-based federal student aid.
“This adjustment will maximize aid eligibility and realize the full promise of expanded Pell Grant eligibility included in the FAFSA Simplification Act,” said Kim Cook, CEO of the National College Attainment Network. “However, we need details on how
and when this update will roll out since it could further delay FAFSA data getting to colleges and states that expected to receive applicant data by the end of January. We will continue to support our students in what could be a further compressed
financial aid award timeline this spring.”
It’s important to note that this latest fix is a change to the math behind the FAFSA—no change is occurring to the application itself. As outlined in Section 478(h) of the FAFSA Simplification Act, ED did not revise the income protection allowance, employment
expense allowance, and asset protection allowance tables, or the assessment schedules for inflation prior to opening the 2024-25 FAFSA. These tables are primarily designed to create allowances against the family income. These allowances will reduce
the available income to be used in calculating a student’s SAI. With these adjusted tables, the SAI is likely to be lower for most students, which leads to additional eligibility for need-based aid.
In typical years, using inflation rates to adjust the tables would have resulted in slight adjustments. However, the inflation rate between April 2020 and April 2023 (the prescribed timeframe to use) was over 18%. This rate of inflation will make the
allowances in the tables significantly larger than the ones currently being used by ED.
In a statement to stakeholders on Tuesday, ED wrote, “We will share more details on the timeline for these updates soon. We understand the urgency in providing clear information to schools, counselors, students and families.”
The update will likely cause additional delays for institutions in preparing and sending financial aid awards to students. Typically, it takes colleges a couple of weeks to load the FAFSA data for their student applicants, test their system, and model
award amounts.
“Schools were promised FAFSA applicant data by the end of January. With less than a week to go, [ED] has announced a significant operational change that clearly throws that date into question,” said Justin Draeger, President and CEO of the National Association
of Financial Aid Administrators. “Also concerning is the fact that institutions haven’t received any operational updates about when they will receive FAFSA applicant information, preventing financial aid practitioners from moving forward with processing
and packaging financial aid offers. Even once that information is delivered, distributing financial aid offers to students will take at least several more weeks.”
NCAN understands the significant strain that the already delayed FAFSA and processing present to students, especially those from low-income backgrounds who rely on aid offers to affirm they can afford college. Advisors already have three fewer months
to help students complete the FAFSA. That delay alone is especially challenging in states with universal FAFSA requirements for graduation and for students trying to meet priority aid deadlines as early as January 15 at some institutions or private
scholarship programs. An additional processing delay further limits the time students must consider aid offers and make the choice about if and where to enroll. Advisors and school counselors will be asked to support their full caseload of students
in as little as six weeks before the traditional May 1 enrollment commitment deadline. NCAN expects to call for flexibility on that date once the timing of applicant data is confirmed.
Yesterday’s news comes while students, families and advisors still face challenges with the new form, including the inability of those without
Social Security numbers to contribute to the online form, preventing mixed status families from completing the streamlined form online. NCAN is continuing to advocate for solutions and will keep members updated.
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