It’s been a frustrating couple of years when it comes to the FAFSA for everyone involved. After a complete overhaul of the FAFSA, here are 9 changes you need to know about.
This resulted from a number of FAFSA changes along with the simplification process that was implemented by the government with the intention to streamline it and make it easier for families to complete in addition to automatically pulling tax information from the IRS and expanding eligibility for certain student populations.
Now that a lot of the kinks have been worked out and the dust has settled I want to point out some of the important changes and what you need to know about the FAFSA.
- Less Questions – The FAFSA went from 108 questions down to between 18-50 depending on student/family circumstances which makes it less tedious to complete.
- Separate logins for student and parent – the student and parent now have their own separate logins (using their FSA ID’s) whereas before, you could log into the FAFSA as the student or parent and navigate through both the student and parent sections then sign at the end with the student and parent FSA ID’s. Rather than feeling more streamlined this has created some confusion. Either the student or parent can complete their section first, and whoever completes their section last needs to be sure to sign and submit it.
- Automatic Import of Taxes – No more Data Retrieval Tool! Now, taxes are automatically imported into the FAFSA rather than having to use the DRT which has made things easier for sure.
- The Expected Family Contribution is now called the Student Aid Index – The reason for this change is because students/families thought the expected family contribution was the amount of money they would have to pay for college and in many cases they had to actually pay more than the EFC creating frustration and confusion. Changing it to the SAI makes it more clear that this is just an index college financial aid offices use to determine financial aid offers.
- No more benefit for multiple children in college at the same time – This is a tough change to digest and is having a significant financial impact on many families. In the past, the EFC (SAI) was divided equally among the number of children in college, which in many cases meant more financial aid for each dependent student in college. The SAI is no longer being divided equally among the number of children in college. Each child will essentially have the same SAI which means less financial aid for families who have more than one child in college at the same time.
- Changes to a couple protected assets – Business and family farm net value now have to be reported on the FAFSA whereas they didn’t before. This value drives up the SAI which can mean less financial aid.
- Changes to untaxed income – One of the more positive changes is that students/families no longer have to report cash support from family or friends, veteran’s benefits, and worker’s compensation on the FAFSA. Additionally, child support is now considered an asset instead of untaxed income. This means less income will be factored into calculating financial aid eligibility which is great.
- 529 plan changes – In the past parent’s used to have to report the total value of all 529 plans they own for multiple children on the FAFSA, now they only have to report the value of the 529 plan owned for the child whose FAFSA they are completing. Additionally, 529 distributions are no longer counted as untaxed income for the student.
- Pell grant eligibility expanded – Changes were made to the federal financial aid formula which has made pell grants available to more students and increased the amount of money some students receive.
As you can see, there have been some good and not so good changes to the FAFSA. The good news is, many of the kinks have been worked out and the 26/27 FAFSA is on track to open on October 1st this year whereas it has been significantly delayed the last two years.
If you haven’t yet filled out a 25/26 FAFSA, now is the time to do it. Even if you don’t think you will qualify for financial aid, I recommend filling one out as some colleges require it to be completed for Merit Scholarship consideration. And at the very least you can appeal your financial aid offers. 80% of the students/families I help through the appeal process receive additional aid, I’ve seen it range anywhere from $3000 all the way up to $30,000! Also, a number of colleges will take multiple children in college at the same time into consideration through the appeal process. So it’s 100% worth trying!
The earlier you fill out a FAFSA the better, it could mean more financial aid!
Be sure to follow me on Tik Tok, Instagram, Facebook and YouTube where I provide free information regarding financial aid. I also have a free public Facebook group called Financial Aid 101 which you can request to join here.
And if you are the parent of a rising High School senior, class of 2026 be sure to check out my signature program, The Financial Aid Academy, which I run every year from September through May for HS seniors and their parents. The Academy will help you navigate the overwhelming and confusing financial aid process and get the best financial aid offers possible! You can learn more here.
Tina Steele, The FAFSA Guru, has over 30 years of experience working in higher education with expertise in financial aid. She has her Master’s Degree in Higher Education and offers a number of programs and services to help families successfully navigate the college financial aid process and maximize their financial aid offers. She is also mom to 4 daughters and 2 bonus sons ages 18-31, so she has been right where you are as a parent and knows how stressful it all can be. She is passionate about taking the stress out of the process for families, helping students get all the aid they are entitled to, and offering affordable programs and services so that every family can benefit from her guidance. You can learn more at thefafsaguru.com.