The college planning process isn’t easy. Picking the right school, finding the perfect roommate, meeting scholarship application deadlines, and on top of all of that…..you have to fill out the FAFSA. Many families who think they are on the border or won’t receive any financial aid don’t bother tackling this daunting form because of the number of questions it prompts you to answer. Well, I have news for you! Change is coming in December 2023!
The Department of Education has decided to do a redesign overhaul on the FAFSA that will affect over 17 million students. Let’s talk about the good, bad and the ugly:
The new form is being released sometime in December, which forces schools to wait longer on acceptance decisions, or offer acceptance without any financial aid. This can cause more stress for students and their families. If you accept an offer without any aid there is no telling how much, if any, you will be granted in the future. According to Brad Baldridge, CFP at Baldridge College Solutions, colleges and universities are unable to integrate this new form into their computer system until sometime this summer. This leaves schools prone to delays and technological errors. There are delays on the student side as well. With the new form having a December release date, students will wait longer to commit. With delays on both sides of the coin, schools will have empty seats that desperately need to be filled. It is going to be a learning process for everyone, and unfortunately the Class of 2024 are the guinea pigs.
FAFSA is turning its focus to assets rather than income. Both are still important but if you are a business owner, you will have to determine a valuation for your business. Families in high-tax states will no longer receive a tax credit either, reducing their return, or increasing what they owe at tax time. Middle and upper-class families aren’t benefiting from this as much as they could be. The cost of college is still rising, while family income is staying relatively flat. If you throw inflation into the mix that adds another layer of difficulty when trying to pay for college, especially if you don’t qualify for any aid.
To end on a good note, I saved the positive changes for last. The new FAFSA will grant more aid to students who come from low-income families, and potentially some who were previously on the border of receiving any aid at all. This is because of the new “advantageous” formula they will be using for the Student Aid Index (SAI) starting in the 2024-25 academic year. The SAI will replace the Expected Family Contribution (EFC) that is currently in place. They are lowering the number of questions on the form from 108 to 36! This makes it much faster to complete and may even convince more families to fill it out. Asset reporting dates are also being shifted (we are unsure of the specific date at this time) but this could lead to a potential planning point with your financial professional.
We can help navigate these changes and develop a clear path for your family. Please contact PrairieFire today for a free “Paying for College” assessment.