When the FAFSA Simplification Act begins to take effect this July, it’s expected to significantly affect the process of applying for financial aid, making the paperwork less complex and altering the formula for eligibility. However, there has been scant information on the specific impacts at a national level. Now, the State Higher Education Executive Officers Association (SHEEO) has begun to fill that void with the release of new data estimating changes in how student and family assets will be calculated and how much students will get.
SHEEO based its analysis on national and state data from the 2017-18 National Postsecondary Student Aid Study, Administrative Collection. What they found was good news for potential aid recipients: estimates of the financial resources of students and families will go down for many. This is a result of changes in the formula for calculating what used to be called Estimated Family Contribution (EFC) but will be called Student Aid Index (SAI) when it is phased in during the 2024-25 academic year. Over 45% of students from the data sample would experience a decrease from EFC to SAI of $1,000-$2,500.
Rachel Burns, senior policy analyst at SHEEO
Lower SAI numbers will lead to a greater number of students being eligible for Pell Grants. SHEEO calculated that almost 43% of the students in their data who were originally ineligible for Pell Grants would now qualify, an increase of over two million students. That’s almost double the percentage increase in Pell recipients that had been estimated by the Office of Federal Student Aid. Nearly 85% of Pell-eligible students would see their award amounts increase by up to $8,800, with the largest segment seeing a $5,000 boost.
These increases in eligibility could lead to even more aid, according to MorraLee Keller, senior director of strategic programming at the National College Attainment Network.
“A lot of colleges, in their packaging strategies, direct the most aid to students who are Pell-eligible,” she said. “So if you were not previously Pell-eligible and now you are, that may bring additional forms of aid to help you meet the costs of higher education.”
Keller also thought that the improved Pell access could also increase enrollment at community colleges, which has been damaged by the pandemic.
