The New FAFSA: What Every Advisor, Parent and Student Should Know

Recent legislative changes will impact the student financial aid process and could create stress and confusion. Dr. Peter Mazareas, author, college financing expert and Co-Founder of Invite Education, shares some need-to-know information for parents, students, and financial advisors.

In 2021, Congress enacted legislation which directed the Department of Education (DOE) to simplify the Free Application for Federal Student Aid (FAFSA) form. Typically available in October for the coming academic year, the revised and simplified FAFSA will be released in December and will substantially change how financial aid eligibility is calculated. Given the changes detailed below, the delay could create confusion and stress for those families applying for financial aid, whether for a high school senior or a returning college student.

We think it’s important for financial advisors, parents and students to understand the changes and the steps they should take now—and in the future—to enhance their ability to maximize their financial aid eligibility.

Some key highlights and changes to know about the new FASFA:

  1. The number of questions will be reduced from 108.
  2. A new eligibility formula and calculation, the Student Aid Index (SAI) will replace the Expected Family Contribution (EFC).
  3. Cost of Attendance (COA) reported by schools has been redefined, substantially expanded and standardized to reflect true cost.
  4. The FAFSA Submission Summary replaces the Student Aid Report.
  5. Automatic transfer of IRS tax returns from IRS directly to the FAFSA.