The 2024-25 Free Application for Federal Student Aid (FAFSA) is the revamped version purportedly designed to streamline the process and make life easier for FAFSA applicants.
Really? A closer look reveals potential concerns that merit careful consideration.
Let’s delve into some critical changes in FAFSA that require your attention and understanding.
The FAFSA application was only made accessible through a limited “soft launch” on December 31, 2023. In previous years, the FAFSA would have been accessible as early as October 1, 2023, allowing families to submit their applications early. This early availability traditionally facilitated colleges receiving aid information early, enabling families to receive financial aid offers early. Consequently, families could engage in a competitive review of various offers, leading to well-informed decisions. Not this year! The altered timeline for the FAFSA application in the current year has disrupted this established process.
College Financial aid staff will not receive families’ FAFSA information until mid-March. This delay implies that financial aid offers, which typically would have been distributed in January in previous years, are now expected to be delayed until mid-April.
To navigate the financial aid process effectively, it is crucial to assume full ownership of the process. As the captain of your ship, don’t presume smooth sailing ahead. Take charge by ensuring that you follow up on every detail. Foster collaboration with all the colleges you’ve applied to and proactively visit the financial aid office to check that all the t’s are crossed and the I’s are dotted. Run, don’t walk!
In prior years, only the student and one parent were required to possess a Federal Student Aid ID (FSA ID). However, for the 2024-25 form, anyone providing information, including the student’s spouse, biological or adoptive parent, or the parent’s spouse, must also obtain an individual FSA ID. Creating an FSA ID requires “contributors” to furnish their Social Security Numbers and email addresses – or nothing moves forward. Students should acquire their FSA ID first before all other “contributors”.
The revised FAFSA permits students to submit their application to a maximum of 20 schools.
Sibling Discount Rescinded!
In contrast to the previous FAFSA formula, which factored in multiple children concurrently attending college, the new formula does not. Consequently, families with multiple students in college will no longer receive any financial benefits. It’s essential to appeal the sibling discount removal at the college chosen to attend, particularly if your children are enrolled in colleges with substantial endowments. These institutions might decide to compensate for the loss of funding using their discretionary funds. Historically, if your Expected Family Contribution (EFC), now called the Student Aid Index (SAI), was $20,000, the amount was split between the two children. Now, it will be $20,000 per child. This is the opportune time to appeal for additional funds as soon as possible!
Farmers and Small Business Owner Changes
Families with an Adjusted Gross Income (AGI) of $60,000 or more operating small businesses with 100 or fewer employees will experience a change. This new FAFSA legislation will also impact families owning farms with an AGI over $60,000. Under the new rules, the business and the farm will now be regarded as financial assets eligible to contribute to college expenses. In the past, this did not apply. However, families with an income of $59,999 or less are exempt from reporting any assets, including the valuation of a small business or a family farm.
Custodial Parent Changes
In cases of parental divorce or separation, the FAFSA completion responsibility now falls on the parent who provides the highest financial support. This marks a departure from the previous requirement, where the custodial parent, defined as the one with whom the child primarily resides in the year leading up to FAFSA filing, was obligated to complete the form. This adjustment will likely prompt delicate discussions and necessitate a thorough financial review, accompanied by the submission of relevant documentation.
And now, some good news!
Commencing the 2023-24 academic year, students are no longer required to disclose cash support from grandparents or extended family when completing the FAFSA application. Grandparents holding 529 accounts for their grandchildren can utilize these funds for college tuition without adversely affecting their grandchildren’s eligibility for financial aid.
This modification stems from the stimulus bill passed at the close of 2020. Previously, FAFSA considered contributions from grandparents as untaxed income to the grandchild, subjecting them to a 50 percent assessment—significantly higher than the 5.65 percent rate applied to a parent’s contributions.
For instance, a $20,000 contribution from a grandparent could reduce a student’s financial aid by $10,000. Consequently, many grandparents postponed their distributions until the student’s junior year of college to avoid these contributions affecting the FAFSA. With this alteration, such strategic delays are no longer necessary.
Final Thoughts About the 2024-25 FAFSA
Given the anticipated increase in appeals this year, it is crucial to communicate with the financial aid office as early as possible after receiving your offer letter if you think you have the need to appeal. Reach out to the office directly and collaborate with a designated financial aid counselor. Remember, it’s up to you to take full responsibility for the entire process and adopt an assertive, not aggressive, approach.
Learn more about paying for your graduate nursing education without going broke in Buck’s book, written specifically for graduate nursing students who need an effective college funding plan. It offers little-known but highly effective strategies for financing graduate nursing programs without going broke.
1. Do not self-determine that you are ineligible for any kind of federal, state, or institutional financial aid. Submit all financial aid applications. Check with your college financial aid office for specific application forms and required steps.
2. The FAFSA application can be completed at FAFSA.gov, and it is a free application.
3. The FAFSA will ask for tax information from two years ago, even though you are no longer employed. Go ahead and list your income from the two prior tax years, as required, but later you will file an appeal letter documenting your current financial reality. There is no place to write an appeal on the FAFSA form so you will have to write a separate letter, with documentation to the college financial aid office.
4. If your student was offered a merit scholarship by the school, ask for additional merit scholarship funds due to the loss of income, especially if the student will be attending a public out-of-state institution.
5. Are you separated from your spouse? If so, for FAFSA filing, only include the income of the parent that the dependent child lives with more than half time. You do not have to be legally separated or divorced.
6. You should always shop and compare all federal, state, college, and private loan opportunities. For federal and state loan programs, you will still need to complete a FAFSA.
7. If there are other relatives in the household besides a spouse and children that are dependent on the family and reside in the household such as grandparents, make sure to include them in the total number of dependents in living in the household.
8. If there any health costs not covered by insurance, make sure to list them when you submit your letter of appeal, with documentation.
9. If a parent decides to go back to college, at least half-time, tell the financial aid office. They might consider counting the parent as an additional family member in college possibly resulting in additional financial aid.
10. Run, don’t walk, virtually to the college financial aid office for immediate guidance. Follow-up and follow-through.
1. I just became unemployed and when I submitted my FAFSA back in October, I was told that we didn’t qualify for any need aid assistance. What do I do now?
a. Step One: Go immediately to your college’s financial aid website to see if there are any updates on how to appeal. If there are no updates check to see if any instructions are listed on how to appeal. Some colleges have step-by-step instructions, and some simply do not. Or, call or email the college for advice.
b. Step Two: How to Appeal: Gather all necessary paper documentation that supports your appeal letter. Any type of loss of family income is appealable, as long as you can prove your situation. Even loss of savings can be appealed in addition to unemployment. Make sure to keep a copy of all appeal information and then by certified mail to your college’s financial aid office.
c. Step Three: When to Appeal: Appeal immediately because hundreds, if not thousands of your classmates will be appealing as well. Warning: Do not self-decide if you should appeal. You can’t win if you choose not to appeal, even if you or your family’s income used to be high.
2. How often do appeals get granted?
a. Usually about 30% of the time, but that percentage will be increasing due to the Coronavirus and all its impact.
3. Could I possibly qualify for any other aid, such as state aid?
a. Yes! Check with your state Higher Education Agency and ask how you can appeal for additional need-based funding. Also ask your financial aid office for guidance.
4. I am a grad nursing student and I received some need-based grant funds. Do I follow the same steps you have just described to appeal for additional assistance?
a. Yes, however, you need to appeal directly to the graduate school of nursing financial aid office, not the undergraduate financial aid office.
5. Will appealing for more financial aid reduce my chances of being admitted to my college of choice?
a. No. Every college is trying their best to address students’ needs. The issue will be the amount of additional funding available. Some colleges have large endowments, and some do not. That’s why it is urgent to appeal now!
6. Since it will take time to have my appeal reviewed, is there any other kind of immediate funds assistance? I don’t want to deal with a lot of red tape.
a. The good news is yes! Colleges and universities have historically had emergency funds available for students, but they are not always well-known, nor well-advertised.
b. Today, several schools have made funds available to give to students in the form of one-time grants as the ongoing pandemic has forced thousands of students to leave their campus and cope with financial hardship.b. Today, several schools have made funds available to give to students in the form of one-time grants as the ongoing pandemic has forced thousands of students to leave their campus and cope with financial hardship.
c. Ask your school if it has an emergency loan or grant fund you can apply for, and how you apply. Best to ask the financial aid office for assistance.
7. Even if I have been awarded my maximum amount of financial aid, I can still apply for emergency funds?
a. Yes. An emergency is an emergency. You need funds now. Just remember that emergency funds are limited, so make that call ASAP. Make sure to specify how much you need and how the Coronavirus adversely impacted you.
8. Since I was told by the college that I had to leave campus due to COVID-19, how do I appeal to get my money back for my room and board that I already paid?
a. Great question. It all depends. Every college is handling this issue differently. Some colleges will give students who paid their bill for the spring semester a prorated credit for room and board to be applied for the fall semester. Other schools will allow students to receive a partial refund for the difference in their prorated housing and dining plans. You have to ask the office of on-campus housing how you can get a refund.
9. What can I say to alert I my college that I am financially in trouble?
a. Appeal for additional fund consideration by saying “I will have to drop out!” The reality is, it costs more to recruit a student than it does to retain a student. And schools are all about saving money and helping students.
10. Can I appeal for additional merit scholarship assistance, not based on financial need (my income) or my family’s income?
a. Yes, you can and should. As we wrote in our book, take ownership of the college funding process, either need-based or merit-based.
b. Best way to appeal for additional merit scholarship funds due the pandemic is to appeal directly to the office that awarded you the merit scholarship. For example, most colleges will award merit scholarships from the admissions office if you are a first time undergrad, as in a freshman. The other office to contact would be the office of your major: English, History, Engineering, etc. Review your merit award letter and determine which office or offices gave you your merit award and appeal directly to the awarding authority.
