JB Pritzker, Governor, State of Illinois

Implementation of FAFSA Simplification Act

(Last updated: February 16, 2024)

Overview
Financial Aid Application Process for the 2024-25 Academic Year
Resources
Dear Colleague Letters (DCLs)
Electronic Announcements
Other Resources (includes link to 2024-25 FAFSA Issue Alerts)

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-24-01: 2024-2025 Federal Pell Grant Maximum and Minimum Award Amounts
    • Includes the Federal Pell Grant maximum and minimum award amounts for the 2024-25 award year (July 1, 2024 through June 30, 2025). With the release of the 2024-25 FAFSA form in December 2023, ED is providing the Pell Grant maximum and minimum award amounts so institutions may inform students and families about their eligibility for a Federal Pell Grant. All 2024-25 Federal Pell Grant awards must be based on these amounts. As a reminder, the FAFSA Simplification Act changed the process for determining the amount of a student's Scheduled Pell Grant award – details are provided in the DCL.

Electronic Announcements

  • GENERAL-24-12: Additional 2024-25 Test ISIR Data File and Other Tools Available
    • Announces that the U.S. Department of Education (Department) has begun publishing additional test versions of the Institutional Student Information Record (ISIR). The new test ISIR data file contains fictitious student records with realistic field values for different scenarios. Testing is optional. ED also has begun publishing open-source tools to help colleges, third-party servicers, and software vendors with their testing and preparations for the 2024-25 ISIRs.
  • GENERAL-24-11: 2024-25 Award Year Flexibilities and Department Letters to Presidents
    • Announces steps to help colleges process student records faster and more efficiently, building upon the work that is underway to support colleges and students through the FAFSA College Support Strategy. In addition, an e-mail message from the Secretary of Education is being sent to leadership at all institutions of higher education, to ensure they are aware of the support and services available to them under the FAFSA College Support Strategy.
  • GENERAL-24-06: 2024-25 FAFSA Student Aid Index Update and Timeline 
    • Provides an update regarding the 2024-25 Free Application for Federal Student Aid (FAFSA®) process, including further details regarding aid eligibility and the post-processing experience for students, institutions, state higher education agencies, and scholarship organizations. Based on current estimates, ED anticipates starting to transmit batches of FAFSA information (ISIRs) – which will include updated SAI tables – to schools and state agencies in the first half of March.
  • COD-23-08: COD School Testing for the 2024-25 Award Year
    • This announcement provides high-level information about COD School Testing for the 2024-25 award year, which will take place from January 8, 2024 through December 13, 2024. Any school that will participate in the Pell Grant, TEACH Grant, or Direct Loan program for the first time in the 2024-25 award year must complete school testing with the COD System before sending data into production. While other schools are not required to test with the COD System, all schools, software providers, and third-party servicers may participate in testing.
  • GENERAL-23-115: 2024–25 FAFSA Soft Launch Details and Timelines
    • ED expands upon previously-shared information regarding the timeline of the 2024-25 FAFSA® form launch, and also shares details about what applicants and families can expect through February 2024. ED will be treating the period leading up to and following December 31, 2023 as a "soft launch" period, during which they will be monitoring site performance, conducting planned pauses for maintenance, and making updates to improve the user experience for students and families.
  • APP-23-21: Draft 2024–25 FAFSA Specifications Guide (December 2023 Update #2) Now Available
    • With this this December 2023 Update #2, ED has updated Volume 2 – FPS Schedule and Getting Help, Volume 3 – Electronic Data Exchange and FAFSA Processing, and Volume 6 – ISIR Guide; these are now final. They also have updated Volume 5 – Edits and Rejects, which was initially published as final on December 7, 2023 (the changes made since December 7 are noted in the volume's Change History Table).
  • 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.
  • APP-23-15: 2024-25 Test ISIR Data File Available
    • Announces the availability of a 2024-25 test Institutional Student Information Record (ISIR) data file for use in optional system testing by schools, state agencies, software providers, and other agencies and entities.
  • 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.
  • COD-23-06: COD Common Record XML Schema Version 5.0b Now Available
    • In spring 2024, ED plans to implement Common Origination and Disbursement (COD) System functionality that will support the processing of Pell Grant, TEACH Grant, and Direct Loan awards for the 2024–25 award year. At that time, this new version (5.0b) of the COD Common Record Extensible Markup Language (XML) Schema will be used.

Other Resources