Implementation of FAFSA Simplification Act
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).
- Electronic Announcement APP-23-03: Notice of the Draft 2024-25 Federal Student Aid Application Materials
- Draft versions of the proposed 2024-25 FAFSA form and the FAFSA Submission Summary (formerly known as the Student Aid Report) are available for public comment.
- Electronic Announcement GENERAL-23-17: Implementing the 2024-25 FAFSA Process
- Announces availability of 2024-25 FAFSA Roadmap
- The launch of the revamped 2024-25 FAFSA is on track for December 2023.
- Electronic Announcement APP-22-26: 2024-25 FAFSA Specifications Guide (December 2022 DRAFT)
- Beginning with the 2024-25 processing cycle, the former stand-alone document listed below are consolidated into a multi-volume FAFSA Specifications Guide.
- Summary of Changes for the Application Processing System
- EDE Technical Reference
- Application Processing System Specifications for Software Developers
- The ISIR Guide
- SAR Comment Codes and Text
- CPS Test System User Guide
- This document will be updated with information and changes as they become available. A "Change History Table" is included in each volume of the guide and will outline all changes made to a volume over time.
- Electronic Announcement GENERAL-22-91: Publication of the 2024-25 Draft Student Aid Index (SAI) and Pell Grant Eligibility Guide
- Provides information about the transition from the EFC to the SAI, and the methodology for determining eligibility for federal student aid (including worksheets and tables used to determine a student's SAI).
- A final version of the guide will be published prior to the start of the 2024-25 processing cycle.
- FSA Partner Connect – Knowledge Center: FAFSA Simplification Information
- NASFAA: FAFSA Simplification Web Center
- Financial Aid Toolkit: FAFSA Simplification: A Better FAFSA Process Means a Better Future for Borrowers
- Federal Student Aid StudentAid.gov: What is the FAFSA Simplification Act?