Overview
The FAFSA Simplification Act, enacted into law as part of the Consolidated Appropriations Act of 2021 and amended by the Consolidated Appropriations Act of 2022, makes many important changes to the Higher Education Act of 1965 (HEA) and the Free Application for Federal Student Aid (FAFSA®). Significant changes are being made to impact need analysis, as well as many policies and procedures for schools that participate in the Title IV programs. The U.S. Department of Education (ED) has set forth a phased implementation approach, with full implementation by July 1, 2024.
Changes set forth in the FAFSA Simplification Act that are scheduled to begin with the 2024-25 academic year will take time to properly implement. Consequently, the 2024-25 FAFSA is expected to be available in December 2023 (rather than in October). ISAC anticipates availability of the Alternative Application for Illinois Financial Aid for the 2024-25 academic year to coincide with the launch of the 2024-25 FAFSA.
This website will be updated as further details becomes available regarding the 2024-25 federal process for requesting financial aid. In the meantime, the following information is provided as a resource to assist financial aid administrators, high school counselors, and other professionals assisting students who plan to apply for college financial aid for the 2024-25 academic year.
Financial Aid Application Process for the 2024-25 Academic Year
As part of implementation of the FAFSA Simplification Act, the 2024-25 federal process for requesting financial assistance is anticipated to reflect the changes outlined below.
- Up to 20 different colleges may be listed on the online FAFSA, and have information sent to them.
- Due to a change in the methodology used to determine aid, a Student Aid Index (SAI) – rather than an expected family contribution (EFC) – is used to measure the student's (and, if applicable, the family's) ability to pay for college.
- The SAI is determined using one of three formulas:
- Formula A – Dependent students;
- Formula B – Independent students without dependents other than a spouse; or,
- Formula C – Independent students with dependents other than a spouse.
- While a negative SAI is allowed (up to a minimum SAI of -1,500), colleges may not package above the applicant's cost of attendance.
- Although there is no simplified needs test in the SAI formula, certain applicants will still be exempt from asset reporting based on their income and tax filing status.
- The new need analysis formula no longer factors the number of family members attending college into the calculation.
- Separate criteria to determine eligibility for the Federal Pell Grant Program, linking eligibility to family size and the federal poverty level, make program funds available to more students.
- The Pell Grant scheduled award calculation will consists of three steps:
- Step 1 – Maximum Pell Grant Eligibility;
- Step 2 – Student Aid Index Calculation; and,
- Step 3 – Minimum Pell Grant Eligibility.
- Revisions to several of the processes and systems used to award federal student aid are required, including a new interface to directly receive federal tax information from the Internal Revenue Service (IRS) – this change is made possible by the Fostering Undergraduate Talent by Unlocking Resources for Education Act (FUTURE Act).
Resources:
Dear Colleague Letters (DCLs)
- DCL GEN-23-12: 2024-2025 Award Year: FAFSA Information to be Verified and Acceptable Documentation
- Provides information that supplements the 2024-2025 award year verification information provided in the Federal Register notice (88 FR 64421) published on September 19, 2023.
- DCL GEN-23-11: FAFSA Simplification Act Changes for Implementation in 2024-25
- Summarizes changes to requirements under Title IV of the Higher Education Act resulting from the FAFSA Simplification Act that will become effective for the 2024-25 Award Year, including significant modifications to the need analysis formulas and calculation of Federal Pell Grant awards.
Electronic Announcements
- Draft 2024/2025 FAFSA Form
- APP-23-16: Announcing the 2024-25 FAFSA Prototype
- While not a complete replica of the 2024-25 FAFSA form that will be available on fafsa.gov, the prototype is a web-based design tool that offers the financial aid community an opportunity to navigate specific scenarios that many 2024-25 applicants will encounter.
- GENERAL-23-78: Release of Revised Federal Student Aid Estimator
- Announces the release of a newly-revised Federal Student Aid Estimator that provides an estimate of the new Student Aid Index (SAI) – which will be used to determine financial aid eligibility for the 2024-25 academic year – and revised federal Pell Grant eligibility calculation.
- GENERAL-23-63: Key Terms, Definitions, and Systems Related to FAFSA Simplification and FUTURE Acts
- Details new terminology related to the full implementation of the FAFSA Simplification and FUTURE Acts.
