The 2024-25 Free Application for Federal Student Aid (FAFSA) was scheduled to be released by December 31, 2023. Typically, the FAFSA is released by October 1st to allow time for students and parents to complete ahead of the next fiscal year. Due to the FAFSA Simplification Act, which incorporates the most significant changes to the FAFSA and student financial aid processing in 40 years, the US Department of Education (ED) had to significantly rework the FAFSA form for the 2024-25 Academic Year. ED was given a deadline to release the updated FAFSA online and make it available to be completed by December 31, 2023.
Students and parents will need to complete the updated FAFSA for the 2024-25 academic year in order for institutions of higher education to be able to determine the student’s eligibility for federal student financial aid. As a result of completing the FAFSA, students will now be provided with their Student Aid Index (SAI) amount that will be utilized in a student’s financial need calculation. Below lists the student financial need calculation under the 2023-24 student financial aid regulations and as will be utilized for the 2024-25 year.
|2023-2024 and Prior Need Calculation
|2024-2025 and Prior Need Calculation
|Student’s Cost of Attendance (established by institution)
Less: Expected Family Contribution (EFC – determined by FAFSA results)
Less: Estimated Financial Assistance (EFA – additional non-federal financial aid)
= Remaining Financial Need
|Student’s Cost of Attendance (established by Institution)
Less: Student Aid Index (SAI – determined by FAFSA results)
Less: Other Financial Assistance (OFA – additional non-federal financial aid)
= Remaining Financial Need
A student’s Pell grant was determined by considering the student’s cost of attendance, expected family contribution, and enrollment status in the 2023-24 year and prior. For 2024-25, the student’s Pell grant will only be determined by the student’s Student Aid Index and Enrollment Intensity (percentage of credit hours enrolled compared to the standard full-time enrollment). A student’s direct loans will still be determined using a similar format with a student needing positive remaining financial need to be awarded subsidized direct loans, with direct unsubsidized loans allowed to be utilized as a replacement to the SAI. The Teacher Education Assistance for College and Higher Education (TEACH) grant may also be utilized as a replacement to the SAI. Remaining financial need must still exist for a student to be awarded the Federal Supplemental Educational Opportunity Grant (FSEOG) or Federal Work Study (FWS) funding.
When completing the FAFSA, each individual involved in completing the FAFSA is considered a contributor and must create an FSA ID on studentaid.gov. This includes the student, parents, and guardians involved in providing financial information as a part of the FAFSA completion. A student must invite their contributors to complete the FAFSA and will need each contributor’s name, date of birth, social security number, and email address to complete the invitation. You can find the website to complete the FAFSA here.
We took a more detailed look at the changes from the FAFSA Simplification Act in August which can be found here. If you have any questions regarding the upcoming federal student financial aid changes or may need assistance from RubinBrown in evaluating these new requirements, please feel free to contact us.
Readers should not act upon information presented without individual professional consultation.
Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.