Welcome to our educational blog! Today, we’re diving into the significant updates slated for the Free Application for Federal Student Aid (FAFSA) in the 24-25 Aid Year. These changes, a result of the Consolidated Appropriations Act (CAA), represent a major shift from how financial aid has been processed over the last decade. The FAFSA Simplification initiative reshapes how students apply for federal financial aid, making it critical for colleges and universities to be aware of these developments to support their students and adapt their financial aid strategies effectively.
Sierra-Cedar has been reviewing the U.S. Department of Education (DOE) updates regarding FAFSA Simplification and working with our Higher Education clients to integrate these changes into their operational frameworks. For clients using PeopleSoft Campus Solutions and Oracle Student Financial Planning, we have highlighted key business process areas that require attention. Sierra-Cedar developed a tool to generate test ISIR data for the 24-25 aid year to assist clients in new aid year testing and setup. Additionally, we’ve developed a tool to aid in generating the new Federal Work Study (FWS) Reporting format, which is mandatory for all schools beginning with the 2022 calendar year.
Overview of the 2024-2025 FAFSA Changes
The purpose of the FAFSA revisions is to streamline the financial aid application process, making college more accessible. Here are the critical updates colleges should be aware of:
Simplification of the Application
- Fewer Questions: The FAFSA form will now have around 36 questions, a significant decrease from the previous count of over 100.
- Streamlined Income Information: The form now requires IRS data from two years prior to application for those seeking Title IV funding, minimizing the need for families to provide estimated income figures.
- Application Availability: FAFSA forms can be submitted online beginning December 31, 2023, with a high volume of applications anticipated in late January and February 2024.
- School ISIR Corrections: Schools will have the capability to submit ISIR corrections starting in February.
- ISIR File Layout: The DOE released the Final ISIR Layout specification on November 27, 2023.
- 2025-2026 Expectations: Anticipated features include direct connections to state financial aid applications and provisions for unpaid preparers to complete a student FAFSA form.
Revised Financial Aid Calculation
- Student Aid Index (SAI): The new SAI replaces the Expected Family Contribution (EFC) to better reflect a family’s financial capacity.
- Adjustments to the Asset Protection Allowance: This may affect financial aid calculations for certain families.
- SAI vs EFC: Changes include the exclusion of the number of students in college from the calculation, with small business/farm value now considered. The SAI also aligns the definition of dependents with the IRS definition.
Expanded Pell Grant Eligibility
- Increased Income Threshold: Modifications to income thresholds for automatic maximum Pell Grant will likely extend eligibility to more students.
- FWS Earnings: Reporting required for FWS earnings per student from Calendar Year 2022.
DOE SAIG Mailbox
- FTI-SAIG Mailbox: An updated SAIG Enrollment Agreement is needed for access to 24-25 ISIRs.
- Mailbox Connectors: Institutions using EdConnect or TD Client must upgrade to the latest software versions to receive 24-25 ISIR files.
What Institutions Should Consider:
Adapting to Changes
- Update Financial Aid Counseling: Align counseling services with the new FAFSA structure and calculations.
- Revise Financial Aid Literature: Update materials to reflect the new process and terminology.
Assisting Students and Families
- Educational Workshops: Offer workshops or webinars about the new FAFSA process.
- Increased Outreach: Actively reach out to students who might benefit from these changes.
Collaborating with High Schools
- Partnerships with High Schools: Work with high schools so counselors can advise students accurately during college applications.
- Technology Integration: Update your college’s financial aid software to align with the new FAFSA changes.
The 2024-2025 FAFSA Simplification changes are poised to significantly impact the financial aid landscape. Colleges and universities play a critical role in guiding students through these updates. By staying informed and taking proactive steps, institutions can support their students in navigating the new FAFSA process and accessing the financial aid students require for their education.
Sierra-Cedar recognizes the importance of keeping pace with regulatory requirements and technological advancements. We design our tailored services to assist educational institutions in adapting to these changes effectively and maximizing their business offices and software applications.
Preparation is vital for a smooth transition to these updates. We encourage colleges to stay updated with the latest information and guidelines from the Department of Education and other relevant authorities, like NASFAA. Wishing everyone a smooth transition to the new FAFSA era!
Need assistance navigating these FASFA Simplification process changes? Contact us to schedule a discussion with our Higher Education team.