New and Improved? FAFSA Simplification and SEM

By Chad Sartini, Director of Financial Aid, Veterans’ Affairs, and Records at Virginia Western Community College, AACRAO ASCEND Cohort Member

2024-2025 marks the birth of the new and improved Free Application for Federal Student Aid (FAFSA) with FAFSA Simplification. Details explaining changes to the FAFSA and Federal Student Aid programs next year continue to emerge through Federal Student Aid’s Better FAFSA Better Future Webinar Series and Dear Colleague Letters. But next year does not really mean next year. It means now. The impact of FAFSA Simplification is huge, and SEM leaders should be thinking about what it means for enrollment and retention efforts.

One of the big questions, and still an unknown, is when the 2024-25 FAFSA will open. Federal Student Aid tells us December, and, by law, it must be live by January 1, 2024. Not knowing impacts fall admissions messaging. Below are some questions that many are asking:

• Are your admission office and financial aid office staff discussing the impending changes? 

• Do your admissions staff have the answers they need as they hit the recruitment trail

• What is the impact on early decision programs? 

• For early decision programs that promise a financial aid package with the admission decision in December, have you determined how that is going to work? 

• Will you forego early decisions altogether, adjust your timeline and deadline, or continue with your ED schedule and communicate those admissions decisions will not include a financial aid package?

A New Flow

Another challenge is that the flow of the FAFSA is going to change. A student and contributor (simplification renames parent to contributor) will have to create their Federal Student Aid IDs before beginning the FAFSA. This is important for FAFSA completion events. You will need to communicate this requirement to attendees, so they set up their FSA IDs a few days before the event. Otherwise, they will not be able to complete the FAFSA the same day they create an FSA ID. 

Contributors (formerly known as parents)

Another consideration for FAFSA completion events for dependent students is the student will start the FAFSA, and, once they submit their section, they will invite their contributor (parent) to complete their section. The student will need the contributor’s name, date of birth, Social Security Number, and email address to invite them to complete their part of the FAFSA. So, FAFSA completion events need to be rethought. Instead of a walk-in event, consider pre-registration. This way you can communicate directly with the registrants about what they need to do to prepare for the event, who should attend, and what information they should bring.

New need formulas

With FAFSA Simplification comes a complete overhaul of the need formula for federal financial aid programs. This change will also affect eligibility for state and institutional aid programs. Federal Student Aid projects an overall increase in the number of students who will be eligible for the Pell Grant under the new formula. They caution, however, that with the new formula some students who received Pell previously may not receive it in 2024-25. For example, the adjustment for "number of children" in college is gone with the new FAFSA. Institutions will see some of these students lose Pell and possibly other need-based aid eligibility (state and/or institutional need-based grants and/or scholarships). Below are some questions that many are asking:

• Has your institution determined who these students are and developed a strategy to work with them? 

• Will your institution find a way to keep these students whole with institutional funds?

• What if you do not have institutional funds or your institutional funds are so limited that you cannot keep these students whole? 

• Will you consider professional judgment as the route to assist these students on a case-by-case basis?

Winners and Losers

Siblings in college are just one group that may lose out. Other groups are small businesses and farm owners who will now have to report previously unreported financial information on the FAFSA. Institutions will need a strategy to identify, as best they can, current students who will lose out because of FAFSA simplification and to communicate their options with them. The National Association of Student Financial Aid Administrators created the SAI Modeling Tool to help institutions understand the potential impact of FAFSA Simplification.

Communication will be key

FAFSA Simplification will require a robust communications plan. Communication with prospective and returning students is a must. FAFSA Simplification is as much a retention consideration as is it a recruitment consideration. Communication with campus partners is also key. It should be a given that financial aid staff need to educate admissions staff about changes. What other campus partners need to be in the loop – advisors, student affairs staff, athletics, and academic departments that award scholarships? Institutional leadership also needs to be in the know. They need to know not only how FAFSA simplification may impact the bottom line, but how it will impact certain groups of students. This will allow administration to communicate financial needs to governing boards. 

As shared in the article, The Complication with FAFSA Simplification, “the goal of the 2020 FAFSA Simplification Act is to make it easier for students to apply for financial aid by significantly reducing the number of questions on the FAFSA (Free Application for Federal Student Aid) form." This major overhaul will be a big change but will hopefully benefit students as the act was designed to do. In the meantime, SEM leaders are encouraged to pay close attention as the implementation deadline nears.