Will Latest Changes to FAFSA Increase Your Student Loan Debt?
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Filling out the Free Application for Student Aid (FAFSA) is often met with stress and confusion for students and their families, but changes are underway to make college aid more accessible. However, this could affect students’ eligibility for federal aid, and some may end up paying more.
The Department of Education (ED) has announced a new, streamlined FAFSA for the 2024-2025 school year, due to be released in December 2023. Congress passed the FAFSA Simplification Act in 2020, which aims to reduce the number of questions on the FAFSA form and make Pell Grants and other forms of federal student aid easier to get.
The new FAFSA changes how students and families apply for federal student aid and how eligibility is determined. The ED says this includes a direct data exchange with the IRS for income data details, a new “Who’s My Parent?” wizard and a single portal for all FAFSA help resources.
Students overall will have access to more federal aid, but a recent analysis by the Brookings Institution found that students with siblings in college will likely lose some financial aid, per USA Today.
“These changes, and others, will have profound effects on students’ eligibility for financial aid,” the Brookings Institution indicated, as reported by USA Today. “There will be winners and losers,” and those students who may end up paying more “are unlikely to know that these changes are coming.”
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According to EconoFact, a publication that analyzes economic and social policies, students at the lowest income levels won’t be affected — but people, or their parents, with incomes between $60,000 and $100,000 will see reduced Pell Grants. USA Today noted that this is due to the elimination of the “sibling discount,” which reduced the expected family contribution for those with multiple children enrolled in college.
The new formula doesn’t consider siblings, USA Today reported, and EconoFact suggested the amount of aid these students will be eligible for could be reduced by thousands or even tens of thousands of dollars.
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