Youngsters and Cash: Pandemic aid regulation simplifies FAFSA | Cash

The Coronavirus Stimulants Act passed by Congress in December also provides a huge incentive to help families fill out the often confusing and cumbersome federal grant form known as the Free State Student Aid Application (FAFSA).

The law simplifies the FAFSA by reducing the 108 questions on the form to about three dozen. In addition, some wording in the grant forms will be deleted, new criteria for the eligibility of Pell Grant for financially needy families will be set and the concept known as expected family contribution will be deleted and replaced with an index for study grants.

Conclusion: The changes not only simplify many aspects of the forms for financial aid, but can also increase the eligibility for students who are looking for needs-based help.

The FAFSA measures alone take up almost 170 pages of the 5,593 pages of pandemic legislation. The changes will take effect July 1, 2023 for the 2023-2024 academic year, and will give the Department of Education time to implement the new documents as per a legislative summary.

As Congress simplified grants forms and formulas, other aspects became more complicated, wrote Mark Kantrowitz, grant expert and author of How To Get More Financial Aid, in a recent Forbes article. For example, he said, the simplification did not address data sharing issues, mostly affecting private scholarship programs, nor issues related to some parental assets that could be protected from grant formulas.

According to Kantrowitz’s article, here are the most important things to know:

  • The legislation replaces the expected family contribution with the so-called student aid index. The index is a more accurate way of describing how much families might have to pay for college.

The expected family contribution “is a kind of misnomer that misleads families about the true cost of college,” wrote Kantrowitz. “Some families think the EFC is all they have to pay for college.”

In reality, most families pay more because most schools do not meet a student’s full financial needs.

  • The law sets new criteria for determining Pell Grant eligibility based on the federal poverty line. According to a government estimate, these changes would qualify an additional 1.7 million students for the maximum Pell Grant award, which is currently $ 6,345 through June 2021, and an additional 500,000 who will receive at least the minimum grant of $ 639.

On the other hand, according to Kantrowitz’s article, middle- and higher-income families with multiple children studying in college at the same time could see a significant decrease in financial aid. “This change appears to be intentional, not accidental,” he said.

  • The law contains several improvements to help students apply for more financial assistance. Above all, according to Kantrowitz, universities can no longer pursue the policy of not processing grant applications.

As with any type of legislation, the FAFSA changes don’t regulate everything, but over time, the reforms should give more students the opportunity to get financial aid.