Congress passed the FAFSA Simplification Act in 2020 to overhaul the application process for federal aid and expand students’ access to grant funding with a new analysis formula. Some of the largest changes include: the Student Aid Index, modifications to the family size definition, and reforming policies for the Federal Pell Grant. After years of preparation, the department released the updated form in December 2023 as a soft launch to the public and continues to address issues as they are arise.
As first reported by The Washington Post last December, applicants will appear to earn more annually because the 2024-25 FAFSA does not take inflation into account as part of its evaluation. The federal government initially considered leaving the FAFSA in its current form and would introduce the necessary adjustments during the next academic cycle. However, this meant that students would receive inaccurate award letters stating that they qualified for less financial aid and be responsible for covering the additional costs.
Although this approach would ensure that the application ran smoothly, it intentionally burdened millions of families with higher out-of-pocket expenses and contradicted the purpose of the FAFSA Simplification Act. NPR reported earlier this week that the department plans to include inflation as part of its formula for the 2024-25 FAFSA according to a spokesperson who confirmed the change. With an estimated $1.8 billion in federal aid at stake, this addition will benefit so many who have struggled to keep up with record-high inflation and recover financially from the COVID-19 pandemic.
The consequences for students and institutions cannot be understated. Students will receive additional funding based on a more accurate evaluation of their circumstances while also having less time to prepare themselves financially for the upcoming year. This could influence some to apply for loans that they do not need or to reconsider entering higher education altogether because of the looming deadlines. For colleges and universities across the country, these factors will further strain offices that are already contending with staffing deficits along with the overall transition to the new FAFSA.
At College Aid Services, we understand the uncertainty that offices are facing right now and offer a variety of services to help you meet these challenges. To learn more about how we can assist your institution, contact us at info@collegeaidservices.net or by phone toll-free at 833-GETCAS1 (833-438-2271).
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