New FAFSA: 7 Changes Coming for 2025 to 2026

The 2024-25 FAFSA introduces significant updates designed to simplify the financial aid process and expand access to more students. Key changes include a delayed launch, the introduction of ''contributors'' for tax data sharing, and the replacement of the Expected Family Contribution (EFC) with the new Student Aid Index (SAI).

These adjustments aim to streamline the application process, increase Pell Grant eligibility, and enhance the overall user experience. While these updates offer many benefits, changes to the financial aid calculation formula could impact families with multiple college students. Here's a closer look at these important changes.

1. Delayed Launch and Deadlines

Unlike previous years, the 2024-25 FAFSA form is available starting in December 2023, a few months later than its typical October release. This delay stems from the extensive overhaul of the FAFSA system, designed to enhance user experience and efficiency.

Despite this delay, the federal deadline to submit the form remains June 30, 2025. However, many states and institutions have earlier deadlines, so it's essential to check with your school for specific timelines.

Submitting the FAFSA early ensures you maximize your chances of receiving aid, as some funds are distributed on a first-come, first-served basis.

2. Introduction of ''Contributors''

The FAFSA introduces a new term, ''contributor,'' to clarify who is required to provide financial information on the form. A contributor can be the student, their spouse, or their parents (in cases of dependent students).

Contributors must give their consent for their tax data to be transferred directly from the IRS into the FAFSA. This simplifies the process, eliminating the need to manually input tax information, reducing errors, and streamlining the financial aid application.

It's important to note that contributors are not financially responsible for the student's education costs. Their role is simply to provide financial data to calculate the student's eligibility for aid. The FAFSA system will guide you in determining who qualifies as a contributor based on your responses to specific questions.

3. Consent and FSA ID Requirements

To enhance security and streamline the application process, all contributors (students, parents, or spouses) are now required to create a StudentAid.gov account, also known as an FSA ID. This account is essential for logging in to the FAFSA system, providing consent for IRS data sharing, and electronically signing the form.

Even individuals without a Social Security number (SSN), such as certain noncitizen parents or spouses, can now create an FSA ID, making it easier for all contributors to participate in the FAFSA process.

Students will need to provide their SSN when creating their own FSA ID unless they are citizens of the Freely Associated States (such as Micronesia, Palau, or the Marshall Islands), in which case they can still complete the process without an SSN.

4. Student Aid Index (SAI) Replaces EFC

One of the most significant changes for the 2024-25 FAFSA is the replacement of the Expected Family Contribution (EFC) with the Student Aid Index (SAI). The SAI provides a more comprehensive and accurate measure of a family's financial ability to contribute to educational expenses.

Unlike the EFC, which could only be as low as zero, the SAI can be negative, with a minimum value of -1,500. This negative value allows schools to better identify students with the greatest financial need and target aid accordingly.

The SAI will be used by colleges and universities to calculate financial aid packages, including grants, loans, and work-study programs. While the SAI is not a dollar amount, it provides a clearer index for assessing financial need.

5. Expanded Pell Grant Eligibility

More students will qualify for the Federal Pell Grant, thanks to changes in the eligibility criteria. Starting with the 2024-25 academic year, approximately 610,000 additional students will become eligible for Pell Grants. In fact, 1.5 million students are expected to qualify for the maximum Pell Grant award under the new guidelines.

Pell Grant eligibility is determined by several factors, including family size, income, and federal poverty guidelines. While the Student Aid Index (SAI) plays a role in determining eligibility, it's not the sole factor. This expansion makes higher education more accessible to students from low- and middle-income families.

6. Simplified Application Process

A key goal of the 2024-25 FAFSA changes is to simplify the application process. One of the most noticeable improvements is a significant reduction in the number of questions on the form.

By integrating direct data sharing with the IRS, applicants no longer need to manually input tax information, reducing both the time spent filling out the form and the risk of errors. The number of questions has been cut by more than half, streamlining the application and making it less daunting for first-time filers and renewers alike.

7. Changes to Financial Aid Calculations

The new FAFSA formula includes a change that will affect families with multiple children in college.

Previously, the number of students from one household attending college was factored into the calculation of financial need, often resulting in more aid for families with multiple college students.

However, under the 2024-25 rules, the number of children in college is no longer considered in the Student Aid Index (SAI) calculation.

This shift may lead to a reduced amount of financial aid for families with multiple college students, as the parental contribution will no longer be divided among the children. However, families facing financial strain due to this change may still appeal to their school's financial aid office for reconsideration based on special circumstances.

FAQs About the New FAFSA Form

To make sure you feel confident while filling out the new FAFSA form, we've answered a few frequently asked questions below.

What Is the Difference Between FAFSA Renewal and New FAFSA?

The new FAFSA is for students filling out the form for the first time to apply for financial aid. A FAFSA renewal is for students who have completed the FAFSA in the past and are returning to apply for aid in subsequent years.

The renewal form is pre-populated with information from the previous year's FAFSA, making it quicker to complete. However, students and families still need to update income, tax, and other financial information every year.

Is the New FAFSA Form Easier?

Yes, the 2024-25 FAFSA is expected to be easier due to several simplifications:

• The form will have fewer questions (less than half compared to previous years).
• Direct data sharing with the IRS will reduce manual entry of tax information.
• New features like the ''contributor'' designation will make it easier to understand who needs to provide information.

What Is the Maximum Pell Grant for 2024-25?

The maximum Pell Grant amount for the 2024-25 academic year is $7,395. With expanded eligibility in 2024-25, more students will qualify for Pell Grants, and some may receive the maximum award.

Do Both Parents Need To Fill Out FAFSA 2024-25?

For the 2024-25 FAFSA, both parents may need to provide information if the student is a dependent and the parents are married. If the parents are divorced or separated, only the custodial parent who provides the most financial support must fill out the form. If the custodial parent is remarried, their spouse's information is also required.

What Year Taxes Do I Need for FAFSA 2024-25?

For the 2024-25 FAFSA, you will need 2022 tax information. This tax year is used to calculate your Student Aid Index (SAI) and determine eligibility for financial aid.