NASFAA Statement on FAFSA Inflation Adjustments

While the change will deliver more than $1.8 billion in federal student aid to students, it will also bring further delays in financial aid offers.

Contact: Allie Arcese
Director of Communications, NASFAA
(202) 785-6954
[email protected]

WASHINGTON, D.C, JANUARY 23, 2024 — According to a media report in NPR today, the U.S. Department of Education (ED) has confirmed that it will now update, in accordance with the law, the thresholds used to protect a portion of a family’s income from being considered available for college expenses by inflation-adjusted amounts, which will result in more students qualifying for additional federal student aid.  

The FAFSA Simplification Act of 2020 required that ED annually update the Income Protection Allowance (IPA) amounts to account for inflation and other economic changes. Bringing those numbers current, as NASFAA pointed out as far back as October 2023, will reduce the portion of a family’s income that is considered available for educational expenses, resulting in a lower Student Aid Index (SAI) and potentially increased financial aid eligibility. 

Even though these changes were well-known for years, ED is just now announcing these updates, and unfortunately for students and institutional financial aid offices, these changes were not implemented before the 2024-25 FAFSA was opened to applicants.  How and when this adjustment will be made is still unclear. This means that either FAFSA applicant data will be held even longer before being delivered to institutions, or incorrect applicant data will be given to schools before a reprocessing occurs in the future. 

In response to this news, NASFAA President Justin Draeger issued the following statement: 

“Students and families were promised a simpler financial application process, and to date, too many have been met with frustration, confusion, and delay.

Adjusting these inflationary numbers is the right thing to do, and should have been done from the beginning. Unfortunately, because the Department is making these updates so late in the financial aid processing cycle, students will now pay the price in the form of additional delays in financial aid offers and compressed decision-making timelines. 

Schools were promised FAFSA applicant data by the end of January. With less than a week to go, the Department has announced a significant operational change that clearly throws that date into question. Also concerning is the fact that institutions haven’t received any operational updates about when they will receive FAFSA applicant information, preventing financial aid practitioners from moving forward with processing and packaging financial aid offers. Even once that information is delivered, distributing financial aid offers to students will take at least several more weeks. 

We call on the Department of Education to provide institutions, as soon as possible, with operational guidance on how and when these inflationary adjustments will be made, how and when they will impact FAFSA applicant data being delivered to schools, and whether these updates will result in any FAFSA reprocessing. 

Students and families need the complete picture of what college will cost them — and financial aid offices will be doing everything they can to ensure students have the information they need as soon as possible to make informed college-going decisions.”

NASFAA policy experts are available to speak to members of the media about today’s announcement. To set up an interview, please email NASFAA Director of Communications Allie Arcese or call (202) 785-6954.



The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents more than 29,000 financial aid professionals at approximately 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every 10 undergraduates in the U.S. Based in Washington, D.C., NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators.

Publication Date: 1/23/2024

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