FAFSA Simplification Act
The FAFSA Simplification Act actually does simplify the Free Application for Federal Student Aid form. For most people, it will go from more than 100 questions down to 36. As anyone who has filled out a FAFSA knows, this is very good news. Most issues that students have had completing the FAFSA have been resolved, so students should apply now if they have not already done so.
NEW FAFSA with Direct Data
Shorter FAFSA form
There's a new system that allows the FAFSA to pull information directly from your income tax return. You don’t have to go hunting for your past returns anymore. You just need to give your consent for the transfer of data.
You must create a login
This interface between the simplified FAFSA and the Internal Revenue Service means your private information must be protected. When you try to use the FAFSA, you’ll be directed to a form to give your consent and create an FSA ID, if you don’t already have one. Basically, it’s a username and password. FSA will then verify your information, and you can log in.
Because there's security involved, there will be multi-factor verification to log in using your FSA ID. Your online bank or credit card site may have something like this. When you log in, you’ll get a text or phone call to a number you’ve provided. This verifies who you are before allowing you onto the site.
If you are determined as a dependent student, then your parents will also need to create their own FSA ID so they can give consent to have their income tax information transferred from IRS to the FAFSA. With the FAFSA Simplification, parents without social security numbers (SSN) may now create their FSA ID after they undergo verification of identification.
Student Aid Index (SAI)
Changes to your family contribution
The new Student Aid Index
A major goal of the FAFSA Simplification Act is to make the amount of aid your student is eligible for more transparent and predictable. In the past, the FAFSA determined aid using the Estimated Family Contribution (EFC). It was a complicated process even for financial aid specialists. Families often had no idea how much they could receive until they got their financial aid offer from the college.
The new Student Aid Index (SAI) is streamlined and better defined. Under certain circumstances, low-income students can be eligible for need-based aid using only the family’s adjusted gross income taken from their income tax return. The new SAI streamlines procedures for students with more complicated income sources as well.
Families with more than one member in college
Under the old Estimated Family Contribution system, if you had multiple family members in college at the same time, your EFC was split between them. Under the new Student Aid Index, the Better FAFSA will still ask the question, but it doesn’t consider the number of family members in college in its calculations.
For example and using some very simplified numbers: Under the old FAFSA, if your EFC was $3,000 and you had three eligible family members enrolled in college at the same time, each enrolled student could have an EFC of $1,000. This would have increased the amount of federal aid they could receive. Now in the Better FAFSA, each of the three will have an SAI of $3,000, decreasing the amount of federal aid.
Changes to Pell Grants
“The federal Pell Grant program is the single largest source of federal grant aid supporting postsecondary education students,” according to The Congressional Research Service (August 2022). These grants are need-based, and you don’t have to pay them back. Your FAFSA form determines your Pell Grant amount.
Pell Grants will now be calculated using the SAI or under certain circumstances, your gross Adjusted Gross Income (AGI) from your tax return. This should simplify eligibility.
The SAI and AGI levels for aid have also been adjusted and should result in more students qualifying for more Pell Grant money. Since the new form is shorter and simpler, there’s no excuse not to apply. In fact, it’s always best to file your FAFSA each year whether you think you qualify or not.
Changes for special or unusual circumstances
Under the new simplified FAFSA, financial aid administrators at colleges must let families know that students who apply for aid can pursue adjustments based on their family and financial circumstances.
Changes can mean delays, so file early
As with any new system, there may be a few bumps in the beginning. Filing early is the best way to have the time you need to get into the new system and submit your FAFSA.
The new simplified FAFSA form will be shorter and require much less effort on your part to fill out. But, if at any point you have questions, please contact the Financial Aid Office for assistance.
If you want the full information currently available on the FAFSA Simplification Act, check out the Congressional Research Service report on The FAFSA Simplification Act.