Nothing is more appealing to soon-to-be and current college students and their parents than free money. However, it’s mind-boggling that so many families fail to fill out the Free Application for Student Aid (FAFSA) form each year.
That’s why we craft a guide to the FAFSA 2023-24 application each fall. The cost of college can be stifling to most families, so you certainly don’t want to miss out on this opportunity. Each year, the FAFSA opens on October 1 and you’ll want to file as close as possible to the start date to improve your chances of qualifying for the most grant, scholarship and work-study aid. Plus, more families than ever may request — and qualify for — aid due to lingering financial impacts from the COVID-19 pandemic.
With that said, the process of filling out the FAFSA form continues to evolve, as it does each year. The phased implementation of the FAFSA Simplification Act adds even more complexity and questions. You need to make sure you’re in the know about this year’s changes so that you don’t leave money on the table, including what to do if your work situation was impacted by the pandemic (remember, the FAFSA 2023-2024 application uses 2021 tax information).
Below are the delays, changes, and updates made to the 2023-24 FAFSA form and process, along with some tips for filling it out.
Key FAFSA Simplification Act Delays
Passed in December 2020, the FAFSA Simplification Act represents a significant overhaul of federal student aid, including the Free Application for Federal Student Aid (FAFSA®) form, need analysis, and many policies and procedures for schools. The Department of Education has again delayed the implementation of SOME of these changes until the 2024-2025 aid year. The biggest looming changes for many of our clients fall into four key areas:
- The reduction of the FAFSA from 10 pages and over 100 questions to 3 pages and only 35 questions.
- Increased income protection levels will provide more aid for many, as the Parental Income Protection Allowance will increase by 20% and the Student Income Protection Allowance by 35%.
- The elimination of the multi-child EFC reduction, which currently grants higher aid awards due to multiple children attending college.
- For divorced parents, a shift of which parent completes the FAFSA from the one with whom the student resides to the one who provides the most financial support.
Again, these major shifts have been delayed a second time and will NOT be implemented for the 2023-2024 aid year covered by the 2023-2024 FAFSA application. Additional guidance is sure to come between now and October 2023 when these four key changes will take place. In the interim, consider speaking with a financial and wealth management professional about your options, particularly if your family will have multiple students in college in Fall 2023, or if you are divorced and have a widely divergent income or asset profile compared to your previous spouse.
EFC Changes To The 2023-24 FAFSA
When the FAFSA is released on October 1, 2022, updates to the calculation for the expected family contribution (EFC) will include the following changes:
- The income threshold for an automatic zero EFC has been increased from $27,000 to $29,000.
- The typical family will see their Income Protection Allowance increase by an average of about $2,000, which in turn will decrease expected family contribution at similar income levels. For example, a family of four with one dependent child in college will now have $32,610 shielded from expected family contribution calculations.
- The Allowance for Student Wages before those earnings impact the expected family contribution has been increased by the largest amount in many years, from $7,040 to $7,600. This works out to about 10 hours per week during the school year and 20 hours per week during the summer at an average hourly wage of about $12.00.
- Unfortunately, the Educational Savings and Asset Protection Allowance has been entirely phased out (a multi-year process) so that starting in 2023-2024 no parental assets will be shielded from the EFC calculation.
Other Changes To The 2023-24 FAFSA Application
- The myStudentAid Mobile App has been decommissioned, meaning that users can no longer submit the 2023-2024 FAFSA application via the mobile app. Users will still be able to complete their FAFSA application on a mobile device by navigating to StudentAid.gov on their mobile browser.
- The requirement for male students to register with Selective Service has been eliminated.
- In light of point #2, both the Selective Service question and the “are you a male or female” question have been removed from the FAFSA.
- The suspension of eligibility for Title IV aid for drug-related convictions has been eliminated, as has the related form question.
Also remember, the following changes went into effect in prior years and should continue to aid your ability to navigate and use the platform:
- The fafsa.gov website has been redesigned so that the site pages will fit the screen size and shape of any device, including desktop or laptop computers and mobile devices.
- The online 2023-2024 FAFSA application provides faster feedback. For example, students now receive error notifications as they complete the form’s fields rather than via future notifications.
Have All The Right Documents Ready
To complete the 2023-2024 FAFSA application, you will need your:
● Social Security Number
● Alien Registration Number (if you are not a U.S. citizen)
● Most recent federal income tax returns, W-2s, and other records of money earned.
(Note: You may be able to transfer your federal tax return information into your
FAFSA using the IRS Data Retrieval Tool.)
● Bank statements and records of investments (if applicable)
● Records of untaxed income (if applicable)
● FSA ID to sign electronically. To create one, go to Studentaid.gov.
● If you are a dependent student, then you will also need most of the above
information for your parent(s).
What About Lingering Impacts from COVID-19
What if your financial situation has dramatically changed since the 2021 tax returns that you’re using for the 2023-2024 FAFSA? You have two options:
- Any parent who has lost their job should check the “Dislocated Worker” box.
- Since the FAFSA does not have an open-ended field to describe changes in family circumstances, you will probably have to endure the Professional Judgment (PJ) process after receiving acceptances.
Unfortunately, the Department of Education says that families must fill out the FAFSA “as is” and then appeal their award: You must complete the FAFSA questions as instructed on the application and then contact the school you plan to attend to discuss how your current financial situation might have changed.
Tips For Filling Out The 2023-2024 FAFSA Application
Not Sure If You’re Eligible? Fill It Out Anyway
A common financial aid myth is that students with parents that have high-paying jobs will not be eligible for FAFSA – wrong! Everyone should fill out a form, regardless of your financial situation. The 2023-2024 FAFSA application is not just for federal grants but it is also necessary for low-interest student loans, work-study programs, as well as scholarships and grants from schools, states, and private organizations.
You should complete the form so you don’t miss out on possibly thousands of dollars to help pay for your child’s college. Don’t fall for these myths about financial aid.
Also, you may not need financial aid now, but anything could happen. If you do need aid in the future, the process will be much easier if you’ve already filled out the form.
Fill Out The Form ASAP
Along with earlier application dates, you can now use previous tax information from two years ago, That means you no longer need to estimate – speeding up the process and eliminating errors. Data shows that use of the IRS Data Retrieval Tool also lessens the chance of an audit of your submitted information.
Learn more about how the IRS Data Retrieval Tool works.
Renew Your FAFSA Every Year Of College
Another financial aid myth is that after a student’s first year, they no longer need to worry about filling out the 2023-2024 FAFSA application – wrong, again!
The amount of federal aid your child qualifies for in one year does not carry over every year. Also, changes in your family’s financial situation could impact the amount of financial aid your child qualifies for in future school years.
To Sum Things Up
Affording college can be a challenge for any family regardless of their situation, but it’s not impossible. By utilizing the tips above and additional resources such as other forms of financial aid and College Savings Plans, affording college can be more manageable than you think.
In addition to these tips, you can also learn more about the 7 Biggest Mistakes Parents Make When Saving For College. And be sure to check out our Family and Finances blog series where we provide financial insights for families.
Have additional questions regarding FAFSA or College Savings Plans? Contact our team of Financial Advisors today! And sign up for our free blog via the panel at right to get monthly wealth management updates like this one sent directly to your inbox!
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