Final 2024-25 Paper FAFSA Approved by Office of Management and Budget

By Jill Desjean, Senior Policy Analyst

The Office of Management and Budget (OMB) on Friday approved the Department of Education’s (ED) draft paper FAFSA for the 2024-25 aid year. The paper form will presumably be released at the same time as the online version, with the exact date yet to be determined but expected in late December before the statutory deadline.

This final version of the paper form reflects changes ED made in response to comments received during its 30-day comment period that wrapped up in October, for which NASFAA submitted substantial comments.

In the final version of the paper FAFSA, ED made some minor language changes and updated state FAFSA deadlines and IRS tax form line number references. The department also changed references to “you” and “your” to “the student” throughout the form for clarity as to who should be answering questions in the student section of the form.

Two significant issues that have come up multiple times over the past several months relate to education savings accounts and business and farm values. ED updated instructions in the “Notes” section for both of these assets:

  • Education savings accounts: Previous instructions on education savings accounts like 529 plans included confusing and, at times, conflicting information. ED clarifies in this final version of the FAFSA that parents of dependent students should report as parental assets only the value of college savings plans designated for the dependent student (not those designated for other children), regardless of whether the account holder is the parent or the dependent student, and that independent students should report education savings accounts as their own assets. 

  • Businesses and investment farms: ED adds clarifying language to what it considers a business or investment farm, adding that they are businesses the family owns (including a small or family-run business) or income-producing farms the family owns, including the fair market value of land, buildings, livestock, unharvested crops, and machinery actively used in investment farms, agricultural, or commercial activities. ED also clarifies what is not considered a business or investment farm, including the value of crops grown solely for consumption by the student and their family, or the home in which they live (principal residence). ED further specifies that the principal residence may include the home, structures, and land that are adjacent to the home that are not being used, stored, or sold for farming or other commercial activities.

New language is added to the “Completing the FAFSA form” section concerning which parent should provide information on a dependent student’s FAFSA when parents are divorced or separated. ED adds new language to existing instructions stating, “If both parents provided an exactly equal amount of financial support during the past 12 months, or if they don’t support the student financially, answer the questions about the parent with the greater income and assets. If this parent is remarried as of today, answer the questions about that parent and the stepparent.”

ED also adds several new instructions on which applicants can skip certain questions on the form.

Several questions were updated for clarity in this final draft. For instance, Question 4 related to the student’s college grade level, adds Graduate Certificates to the “Master’s or Doctorate program” option. Question 16 clarifies that parents killed in the line of duty for purposes of Pell Grant eligibility under the special rule must have served in the U.S. armed forces, and also adds new information about why this question is being asked.

ED accepted a suggestion from NASFAA to remove the “Optional” designation from the question asking the amount of college grants, scholarships, or AmeriCorps benefits reported as income to the IRS. While the question remains optional and will not hold up FAFSA processing if left blank, NASFAA recommended removing the designation as optional since answering the question is beneficial to applicants. 

In the “Notes” section of the paper FAFSA, ED adds new instructions for how students experiencing homelessness should provide contact information, noting that they can provide an address where they can reliably receive mail.

Instructions on tax filing status for individuals who file non-U.S. tax returns remove reference to converting to U.S. dollars and add a new link for non-U.S. tax filers to get more information on how to answer tax return questions.

 

Publication Date: 12/14/2023


Wilson M | 12/14/2023 8:24:38 AM

Is the word "fax filers" correct?

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