FAFSA Tech Glitches

When it comes to applying to college, few things are more confusing than filling out the Free Application for Federal Student Aid (FAFSA).

The FAFSA is the gateway to federal financial aid, including student loans, grants and work-study. Plus, many schools require the FAFSA before they give out their own scholarships and grants.

But now, thanks to the FAFSA Simplification Act, massive changes have come to simplify the process. Unfortunately, some of those changes are having the opposite effect.

The recent FAFSA changes will negatively impact middle and high income families canceling out some of the beneficial changes such as the increase in the income protection allowance.

Not sure how the new FAFSA will alter your financial aid? Keep reading to see what the new FAFSA includes.

Changes to the FAFSA

The new FAFSA law is bringing some major changes to the table. Some rules will result in thousands of dollars more in aid for some students, while others will end up costing other students thousands of dollars.

Positive changes

New financial aid formula

• Before the new FAFSA law was passed, the formula used to calculate financial aid was known as the Expected Family Contribution (EFC). Now, the new formula, known as the Student Aid Index (SAI), may help more students qualify for aid.
• Before the new FAFSA law, students could only receive a $0 EFC. Now, students can have a negative SAI, which means they may receive more financial aid than before.

More Pell Grants

• The Department of Education says that SAI changes will ensure that about 610,000 new students will qualify for Pell Grant funding. And about 1.5 million more students will receive the maximum Pell Grant, which is $7,395 for the 2023-24 school year.
• The Pell Grant is one of the best financial aid tools since it does not have to be paid back. It can also be used for 12 semesters in total.

Negative changes

Sibling loophole

• One of the biggest negative changes to the FAFSA is that parents with multiple children in college will no longer receive extra credit. Before the FAFSA changes were implemented, a family’s EFC would be divided by how many children were currently enrolled in school. For example, let’s say a family had an EFC of $20,000. If they only had one child in school, then that child’s EFC was $20,000. But if a sibling was also enrolled, then the EFC would be cut in half, to $10,000 per child. This allowed parents with multiple children in college to receive more financial aid. Now, the sibling loophole has been removed.

Exclusion of farms and small businesses

• Previously, the FAFSA did not take into account the value of a family farm or small business (with fewer than 100 employees) when calculating a family’s assets. But now, these assets will be included in the student’s EFC. This may cause some students to receive less in financial aid than they did before. It’s not clear how many students this change will affect. Not all components of the family farm, for example, will be counted as assets. You can go here for a bigger breakdown on how this rule will be applied to family farms.

What families and students can do

If you have been negatively impacted by the new FAFSA - or are worried about it - you can be proactive.

Appeal financial aid

Many families don't understand that the federal government is not responsible for doling out financial aid. The individual school you apply to will issue a financial aid award letter.

After you submit the FAFSA, the schools you apply to will review your results and determine how much financial aid you're eligible for at their school. You will receive a financial aid letter from each school you’re accepted to. These letters will detail exactly how much you will receive in financial aid, including loans, grants and scholarships.

If you still cannot afford tuition based off of these figures, you can appeal the results directly to the financial aid department. A successful appeal usually requires that you prove that your family has hardships that were not seen on the FAFSA. For example, if one of your parents recently lost their job, you can mention that in your appeal. Try to use specific numbers or data to support your case.

Apply for scholarships

If you've been slacking on scholarship applications, now may be the time to pick up the pace. Scholarships can be one way to fill the gap between what you qualify for in financial aid and what you have to pay. Unlike loans, scholarships don't have to be paid back. Also, there is no limit to how many scholarships you can apply for and win.

While some scholarships will ask for the FAFSA to determine financial need, others only base their decision on academic merit and other accomplishments. Plus, even if you're not eligible for a need-based award, like the Pell Grant, you may still receive scholarships that use financial need as a criterion.

Choose schools that offer generous financial aid packages

It's well-known that not all schools have the same financial aid policies. When you're applying to schools, make sure you look at the average financial aid package per student. This can give you an idea of what kind of aid each school provides.

In general, in-state public schools will often be the least expensive option. However,that doesn’t mean you shouldn’t apply to private schools as well.