"The lack of certainty surrounding the rollout of the updated Free Application for Federal Student Aid, also known as the FAFSA, has plagued many in higher education for months now," Volt writes.

... "The recent changes stem from the FAFSA Simplification Act of 2020. The idea of simplifying the form had been lamented for years leading up to the act, according to Karen McCarthy, vice president for public policy and federal relations at the National Association of Student Financial Aid Administrators. The act had two goals, including changing the underlying eligibility formula for financial aid to make it largely more generous to students by increasing eligibility and the size of Pell Grants and streamlining and simplifying the application.

... "The findings from the network, McCarthy explained, suggested that simplifying the FAFSA could help increase college access. Additional findings identified a significant number of Pell Grant-eligible students either went to college without assistance or didn’t go to college because they didn’t think they would be able to afford it."

"'Part of the idea behind simplifying the FAFSA would be to increase the number of students that are actually completing it and that hopefully will drive more lower-income students who are eligible for Pell Grants or subsidized loans to fill out a FAFSA to get assistance with their higher education expenses,' McCarthy said."

... "In late December, the department also announced that, although the form would go live, institutions wouldn’t receive Institutional Student Information Records (ISIRs) until late January."

"'When the department delayed to December, everyone assumed schools would get the information right away because that’s how it always has happened,' McCarthy said. 'It was a surprise because no one thought of those two processes as being separate.'"

... "McCarthy has noticed the delays are forcing schools to be nimble because of the moving target of timelines."

"'It is very stressful. There have been so many delays that financial aid administrators are not 100% confident that they will actually get the processed FAFSAs when Ed is telling them they’re going to get them,' she said."

... "There’s no denying that the formula changes will impact students, McCarthy said."

"'Whenever someone is tinkering with a formula that is as complicated as the federal methodology, there are always going to be some students who benefit more and some students who do not benefit from changes and might actually end up losing some benefits,' she said."

"For example, there used to be an exemption for small business owners so that they didn’t have to report the value of the business if they had fewer than 100 full-time employees, but now the exemption is gone. Small business owners will now have to report the value of the business if they are required to report assets on the FAFSA, which not everyone is required to report, McCarthy explained."

"Those who own and live on a family farm do not have to report the farm as being an asset. However, if the farm produces income, the value of the farm needs to be reported no matter whether the family lives on it or not."

"'For some farm families that are required to report, that could be a significant change that may affect their eligibility,' she said."

"In previous years, there was a consideration in the formula for families with multiple students enrolled in college at the same time. The consideration has been eliminated partially because of equity and predictability concerns."

"'The argument is that it evens the playing field a little bit between families who have children who are spaced closely in age versus families who have children who are spaced further apart in age. In both cases, the families are responsible for paying for two college educations, so it shouldn’t matter if they’re paying for both of them at the same time versus paying for one, then four or five years later paying for another,' she explained."

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

Publication Date: 3/7/2024