The New FAFSA Form is Almost Here. Is Your Higher Education Institution Ready?

For the first time in more than 40 years, significant changes are in the works for the Free Application for Federal Student Aid form, more commonly known as FAFSA. As part of the FAFSA Simplification Act, along with a reduction in the number of questions being asked (from 100 to 38), the new, streamlined form promises to simplify the financial aid application process and expand access to financial aid for underserved groups of students.

For higher education institutions, however, the new FAFSA form is creating its own headaches. The rollout of the form has been bumpy. After delays of several months, the Department of Education announced that the form will be available on or before December 31. If students need to make corrections to their submitted form, the DOE will not begin processing corrected FAFSA forms until February 2024.

The delays have created significant challenges for higher education institutions as they manage student aid awards for the upcoming year. Financial aid administrators, admissions officers, high school counselors and groups that assist students in filling out the form are all preparing for a hectic rollout, anticipating difficulties and proactively raising awareness among prospective students and families.

Key Changes Are Expected

By now, most institutions know what to expect when the new FAFSA is released. In addition to more streamlined questions, the new FAFSA will include a Student Aid Index, which will replace the Expected Family Contribution. There will be modifications to the way a student’s family size is determined, as well as expanded access to Pell grants.

Steps to Take Now

While anticipated, institutions who have historically been accustomed to an October 1st FAFSA release date, will have much less runway this year to process files and assist students while adhering to the unprecedented number of regulatory changes. These are some steps that colleges and universities can take to be prepared:

Stay up to date on FAFSA changes. Institutions must stay apprised of the latest changes and updates to the FAFSA (and related timeline) on the Department of Education’s official FAFSA website.

Staff development. Based on the most recently released information related to changes and process flow, institutions must ensure that team members are receiving training on FAFSA changes, and any institutional process or system changes implemented as the result.

Process and system review. One of the biggest challenges for financial aid offices will be testing and validating all financial aid software functionality for the 2024-25 award year. There are concerns about the availability of software updates based on the new form as well as whether the new software will include a built-in calculator that will calculate Pell Grant award aid correctly. In order to adopt quickly to the new regulations and compliance expectations, Colleges and Universities must ensure that they have reviewed systems and process adjustments needed based on final FAFSA changes.

Keep students informed. Institutions should be ready to field questions from students and parents as they navigate through the new form. Some schools have been providing, and plan to continue to provide, workshop sessions as an available resource to current and prospective students and their families.

Institutional aid policies. Many institutions are also looking at the bigger picture, including the impact that expanded access to the FAFSA might have on their own financial health. If students’ awarded federal financial aid goes down, institutions may need to increase institutional aid to offset the change —especially for current students, who will be immediately affected by the new calculations. Institutions will need to analyze data and run models to estimate how much more aid they may need to award.

If you have questions or need information about new FAFSA reporting requirements for higher education institutions, contact us. We are here to help.

©2023

 

Higher Education Thought Leadership

View All Higher Education Industry Thought Leadership Here.
SUBSCRIBE TO OUR NEWSLETTER

Dan Graves

Dan Graves

Partner, Risk Advisory Services and Higher Education Industry Co-Leader

Contact
LinkedIn
Bio

Dan Graves, CPA, has more than 15 years of experience in public accounting, including 10 years of internal control…

Learn More