NASFAA Virtual Conference Highlight: New Updates on FAFSA Simplification

By Maria Carrasco, NASFAA Staff Reporter

With all the upcoming changes to the 2024-25 FAFSA, NASFAA led a session at its Virtual Conference on Wednesday on key updates coming with FAFSA simplification, including changes to the 2024-25 FAFSA form, the new Student Aid Index (SAI), and more. 

Jill Desjean, NASFAA’s senior policy analyst, began the session by highlighting changes to the FAFSA form, including questions that were either added or removed. Many members have raised questions about child support — specifically, how child support payments would factor into determining which parent provided the most financial support to the applicant for purposes of determining which parent’s information to provide on the FAFSA in cases of parental divorce or separation. 

Officials from the Department of Education (ED) at NASFAA’s 2023 National Conference said that guidance to that question will be given in a Federal Student Aid (FSA) webinar today, July 13, 2023

Desjean also noted that household size will now be called family size for the 2024-25 FAFSA, and will be based on the number of dependents that are claimed on the student or parent’s tax return. She said that, while family size will be transferred from the IRS to the FAFSA, families will have the opportunity to update this field given that families do not always claim everyone who could be claimed on the tax return as a dependent, especially in cases of divorce. 

Further complicating matters is that the family size transferred by the IRS will be masked, so families will not be able to see what figure was transferred. Families will have the opportunity to update this field, and Desjean stressed that all families should use this update feature to enter their family size based on the FAFSA instructions to ensure Pell grant eligibility and the SAI are correctly calculated. She also clarified information that ED has shared that the family’s reported family size will always be used if it is updated on the FAFSA, and that discrepancies between IRS-transferred family size and the family size updated on the FAFSA do not constitute conflicting information and do not require resolution by financial aid administrators. 

A key update to the 2024-25 FAFSA that has caused many questions and concerns from aid administrators is the removal of the housing question — where students plan to live during the academic year — in order to help administrators build their institution’s cost of attendance. Desjean clarified that the FAFSA Simplification Act lists out which questions can be asked on the FAFSA and prohibits ED from asking for any additional information. Therefore, because students’ living arrangements are not included on that list, ED cannot ask that on the FAFSA.

However, Desjean noted, that doesn’t mean institutions cannot ask about the student’s living arrangements. She said institutions can add a question to an existing application or create a form or application to get the answer of the student’s living arrangements, but the institution cannot require any additional forms in order for the student to receive aid. “You can't hold up the processing of their financial aid to find out what their housing choice may be,” Desjean said. 

In a recent “Off the Cuff” episode, David Tollman, NASFAA’s instructional design and content specialist, went through a number of ways institutions can work through the packaging process with the removal of the housing question. 

Additionally, Desjean noted the number enrolled in college question is staying on the 2024-25 FAFSA, but it will not be a factor in determining the SAI or Pell Grant eligibility for a student. 

David Futrell, NASFAA’s director of institutional compliance, also highlighted updates to professional judgment (PJ) under FAFSA simplification, which have been implemented for the 2023-24 year. He stressed that aid offices can no longer maintain a policy of denying all PJ requests. Additionally, ED clarified that institutions cannot have a policy on denying all of a certain type of PJ request either, Futrell said. 

“It means that you must review all PJ requests that are submitted to the aid office, even if you eventually deny that request,” Futrell said. “So even if the PJ requests won't change the EFC, or SAI, once that request is submitted to your office, you still must review it and make a decision and notify the student on your decision.”

Another big change is that aid offices cannot have a deadline for a student or parent to submit a PJ request. However, Futrell noted that PJ requests must be submitted in time to be reviewed, approved, or denied, while the student is still enrolled for the academic year. 

Futrell also debriefed attendees on major changes to cost of attendance (COA) that were implemented for 2023-24. That includes two additional categories regarding separate COAs for different living arrangements. Institutions must now create separate housing allowances for students with and without dependents living in institutionally-owned housing, using the greater of the average or median cost of institutionally-owned housing for each of those groups.

Futrell also stressed that COA must include cost of obtaining licensure, certification, or first professional credential. He encouraged institutions to work with their academic departments to come up with the cost for its program. 

“You should be able to work with the academic departments or survey your students to get an average allowance of average costs for students that are in that academic program,” Futrell said. “So this is a shift in paradigm compared to the way it used to be and not business as usual.”

Karen McCarthy, NASFAA’s vice president of public policy and federal relations, ended the session by noting resources financial aid administrators can use to better understand FAFSA simplification, including NASFAA’s SAI modeling tool and Federal Student Aid’s website. McCarthy noted that ED will be releasing a Dear Colleague Letter (DCL) on 2024-25 FAFSA simplification implementation, 2024-25 FAFSA Specifications Guide volumes 2 and 3, and a glossary of terms around FAFSA simplification this month. 


Publication Date: 7/13/2023

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