The FAFSA Simplification Act, set to take effect from the 2024–25 award year, marks a significant
overhaul of the processes for awarding federal student aid. This includes changes to the Free Application
for Federal Student Aid (FAFSA®) form, need analysis methods, and various policies for participating
schools.
The impact of the law extends to all states using FAFSA data for state grant aid and all schools in federal
student aid programs.
Key changes mandated by the law include:
1. Replacing the Expected Family Contribution (EFC) with the Student Aid Index (SAI), altering how
aid eligibility is determined. The new formula removes consideration of family members in
college, allows for a minimum SAI of -1500, and introduces separate criteria for Federal Pell
Grants.
2. Adjustments to family definitions on FAFSA forms, aligning more closely with information on tax
returns.
3. Broadening access to Federal Pell Grants by tying eligibility to family size and federal poverty
levels. This includes restoring eligibility for incarcerated students and those affected by school
closures or misconduct.
4. Simplifying the FAFSA form by utilizing IRS data for Pell Grant eligibility and the SAI calculation,
facilitated by the FUTURE Act. Additionally, irrelevant questions regarding Selective Service
registration and drug convictions will be removed, while new questions about sex, race, and
ethnicity will be added without affecting aid eligibility. These changes will be implemented in
phases, starting from the 2023–24 award year.
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