In 2020, the FAFSA Simplification Act was enacted into law with the goal of making the application simpler and making more students eligible for federal student aid. Some of the changes are being made to the FAFSA form itself, to the terminologies used, and to how need analysis is calculated.
When you are completing the FAFSA for 2024-25, keep in mind these key changes to help you navigate the new application:
- To start the FAFSA, an FSA ID (or StudentAid account) is required - including for the parents without a Social Security number.
- Questions have been removed regarding
- Housing choices
- Selective Service
- Drug Conviction
- Interest in Work Study
- Students can list up to 20 colleges.
- A contributor is able to correct or update only their sections of the application.
- All student and parent/spouse contributors are only allowed 45 days of inactivity on any incomplete section of the FAFSA before the FAFSA is deleted and will need to be restarted.
New Terminology
- FAFSA Submission Summary (FSS): formerly the Student Aid Report (SAR) that is generated after the student’s FAFSA data is processed.
- Contributor: Refers to anyone asked to provide information on a student’s FAFSA form.
- SAI: Expected Family Contribution (EFC) changes to Student Aid Index (SAI).
- Special Circumstance: Refers to an event which impacts a student’s or their family’s financial situation (e.g. loss of a job, etc.) that would justify the recalculation of a student’s eligibility for aid through a “Special Circumstance – EFC/SAI Calculation Appeal” (previously the Income Reduction Appeal).
- Unusual Circumstance: a student’s dependency status – through an Unusual Circumstance Appeal (previously the Dependency Override Appeal) – may be changed by a financial aid administrator based on unique situations (e.g. human trafficking, refugee or asylee status, parental abandonment, incarceration, etc.).
Contributor
Anyone who is required to report their information on the FAFSA is a “contributor” – typically the student and their parent(s) or the student and their spouse.
The FAFSA form will determine which contributors (if any) will be required to provide information based on the student’s responses to certain questions on the FAFSA. For dependent students with separated parents, the contributor isn’t necessarily the parent who the student lives with the most anymore; rather, it is the parent who provides more financial support to the student.
Students will be asked for their contributor’s name, date of birth, Social Security Number (if applicable), and email address to be able to invite their contributors to complete their portion of the FAFSA form. Contributors will each log in to the FAFSA separately with their own FSA ID to complete each of their specific sections and questions that only they can view.
FSA ID / StudentAid Account
First step first: create an FSA ID for all contributors – including those parents without a Social Security Number (SSN).
Historically, the ability to create an FSA ID has been limited only to contributors with a verified SSN. However, starting with the 2024-25 FAFSA, all parent and spouse contributors without an SSN may now create one.
The account information will be validated against credit bureau data to verify the identity of the contributor without an SSN, and if the system is unable to verify the contributor’s identity, they will be asked to contact the Federal Student Aid Information Center to open a case to establish their identity. They may be requested to complete a form and provide a state ID/driver’s license or other types of ID plus a utility bill.
IMPORTANT: Being a contributor does NOT implicate financial responsibility. However, if a required contributor refuses to provide their information, it will result in an incomplete FAFSA form, and the student will become ineligible for federal student aid.
Consent
All students and parent/spouse contributors must provide consent for federal tax data to be transferred, used, and shared with FAFSA through the IRS Direct Data Exchange (DDX) program. This should result in fewer financial questions being asked on the FAFSA and fewer FAFSAs selected for verification since all contributors’ tax information will come directly from the IRS.
The student and all contributors – including those who don't have an SSN, didn't file taxes, or filed taxes outside the US – must provide this consent and approval on the FAFSA in order to be eligible for federal student aid.
Not providing consent will disqualify students from being eligible for federal student aid.
Student Aid Index (SAI)
What information goes into calculating a student’s financial aid eligibility has changed which will impact your eligibility and award amounts:
- More student and parent income will be sheltered from the financial aid formula.
- The number of children in college at the same time will no longer affect eligibility for federal need-based aid.
- Changes to Reportable Income/Assets
- All assets are considered in the formula – no longer excluding assets of small business and family farm.
- Child support received will be reported as an asset instead of income.
- Distributions from 529 college savings plans owned by a non-custodial parent or grandparent or aunt or uncle no longer affect aid eligibility.
- Types of untaxed income no longer need to be reported:
- Cash support and other money paid on student’s behalf
- Veteran’s education benefits
- Workman’s Compensation
These major changes happening with the form means students may encounter issues with the website and the form that might prevent the submission of the FAFSA. If this happens, come to the IVC Financial Aid Support Labs for help -or- check back on your application every other week to see if FAFSA has resolved that issue so you can continue completing and submitting your FAFSA.