Changes to Federal Financial Aid Filing: What Parents, Students Need to Know

St. John's in the Spring
January 18, 2024

Sweeping changes have come to the Free Application for Federal Student Aid (FAFSA®)—but representatives from St. John’s University’s Office of Student Financial Services say not to worry. 

In fact, a new, streamlined version of the federal government’s traditional financial aid filing, introduced  for academic year 2024–25, might make life easier for parents and students alike. It will just take some getting used to. 

“The application and the application process itself are changing,” said Eileen M. Flood ’90C, ’94L, Assistant Vice President, Student Financial Services, Compliance, and Bursar. “I definitely think it is going to be a process that may take time for families to understand, but we are optimistic. St. John’s is ready to support students and parents through the changes with counselors ready to answer questions and planned workshops to guide families through the process.”

The FAFSA® is the official form used to apply for federal financial aid for college. It is also used by many states and individual colleges and universities in making their financial aid decisions. Specifically, it determines which students will receive aid in the form of loans and need-based scholarships and grants based on the information collected from the application.  

A form of the FAFSA® was instituted as part of the Higher Education Act of 1965. It was standardized for all potential financial aid recipients in 1992. The FAFSA Simplification Act was passed into law in 2021 with the goal of simplifying the filing process.    

Traditionally, families were able to file the FAFSA® as early as October for aid that would begin the following academic year. The 2024–25 filing season did not begin until December 31, 2023 as the US Department of Education needed more time to complete the transition. In future years, the process is expected to return to its traditional October 1 start of filing. 

The new form has been substantially pared down from more than 100 questions, and the US Department of Education is promising better interaction with the Internal Revenue Service (IRS).      

In the past, students and parents could use the IRS Data Retrieval Tool to input tax return information rather than type in tax return data line by line. The new FAFSA Simplification Act requires the use of data directly received from the IRS. The FUTURE Act, another college financing measure signed into law in 2019, requires the disclosure of tax data to the FAFSA® with approval and consent by the parent and student through the Future Act-Direct Data Exchange (FA-DDX) .

This more direct means of data sharing is expected to lead to increased rates of FAFSA® completion. Be advised, however, that without the new consent, students will not be eligible for federal financial aid until consent is provided. 

What Is Changing? 

End of the Expected Family Contribution (EFC): The EFC is an index of a family’s ability to pay for college and determines financial aid eligibility. However, the language has confused many aid filers. Under the new FAFSA®, the EFC is replaced by a Student Aid Index (SAI). The SAI serves as a number used to determine a student’s eligibility for certain types of federal aid. Subtracting the Student Aid Index from the cost of attendance at each school determines a student’s need. 

Increase in School Sharing: Students can have family financial information shared with 20 schools, up from 10 on the current form. 

Who Must Complete the Form: For students whose parents reside in the same household, both parents’ income must be reported on the FAFSA®. For students whose parents live apart, the 2024–25 FAFSA® will  require information from the parent who provides the most financial support to the student—and no longer the parent with whom the student lived with most the prior year.      

Change in Child Support: The new FAFSA® will not count child support received as untaxed income; instead, it will be treated as an asset.

Federal Pell Grant: The Pell Grant is the federal government’s primary grant for undergraduate students with exceptional financial need who have not earned a bachelor’s degree. The FAFSA Simplification Act is expected to expand the Federal Pell Grant to more students and will link eligibility to family size and the federal poverty level.  

End of the “Sibling Adjustment”: Families with more than one child in college at the same time will see an end to the “Sibling Adjustment.” The new formula removes the number of family members in college from the calculation.

“At the end of the day, simplification is always better,” said Maryanne Twomey ’89CBA, ’95MBA, Executive Director of Financial Aid, Institutional and External Programs. “The ability to import data directly from the IRS should really streamline the process.  We are confident that with time and patience the newly remodeled  FAFSA® and application process will benefit students.”