Stay Current: BIG FAFSA changes and NGPF’s Paying for College Unit
An annual tradition here at NGPF is the August deep dive into the Paying for College Unit to make updates. We want to be sure that you’re sharing the most up-to-date information about interest rates, FAFSA deadlines, and loan information with your students.
This year is going to be a little different. We’ve made all of the August updates that we can to lessons and activities, including an increase in interest rates on loans and changes to terminology. However, the FAFSA is undergoing a massive revamp and is currently scheduled to be released in December, not the usual October. Due to this schedule change, we will make additional updates to the Paying for College unit in December as the new FAFSA form is released. We know that many teachers choose to teach the Paying for College unit in September to prepare students for October’s FAFSA. We wanted to give you a heads up so that you have time to reconsider your plan and consider teaching the topic later, when students can interact with the version of the FAFSA that they’ll be filling out.
We will also not be updating the Full Year Course Paying for College Unit in August. The entire Full Year Course will be updated this Fall and all of the FAFSA changes will appear in the new version of that course. Until then, we encourage you to use the Semester Course Unit.
So you know what to be aware of with these updates, let’s get to the big FAFSA changes:
- Shorter Form: The FAFSA is now about 36 questions, way down from 108. Plus, they're making the questions clearer.
- EFC → SAI : Instead of Expected Family Contribution (EFC), we'll now hear about the Student Aid Index (SAI). It’s just a new name to better indicate that this is only a guideline for determining how much a student could afford, not what they’re expected to pay. In addition, the Student Aid Report (SAR) that contains the SAI will now be called the FAFSA Submission Summary.
- Pell Grant Changes: When determining eligibility for Pell Grant money, your adjusted gross income (AGI) will be used in addition to the SAI. Also, students can get a rough idea of their Pell Grant amount before doing the whole FAFSA.
- No More Bonus for Big Families: Before, if you had more than one kid in college, you got a kind of "discount". Not anymore. This might mean less money for some families.
- Which Parent Fills Out the Form?: If parents are divorced or separated, the one who gave more financial support two years ago fills out the FAFSA instead of the parent that the student lives with.
- Money Gifts Won’t Hurt: If a student gets money from grandparents or others for college, it won't be factored into the SAI and negatively affect ability to receive aid.
- Higher Income Protection: The FAFSA income protection allowance is an amount of parent and student income that is excluded from the financial aid eligibility formula. There’s now a bigger chunk of income (for both parents and students) that won't be looked at when deciding on financial aid.
- REPAYE → SAVE: The income driven repayment plan called REPAYE is being replaced by the SAVE plan. This new plan cuts the amount of a borrower's discretionary income that is owed from 10% down to 5% while also accelerating the timeline for loan forgiveness to 10 years instead of the old 20-25 years under REPAYE.
While there are many more niche changes coming to the FAFSA and the overall financial aid process, these are some of the highlights. We encourage you to dig deeper into the changes by visiting some of the following resources:
- Everything You Need To Know About FAFSA 2023-24
- Seven Major FAFSA Changes: What Families Need to Know
- FAFSA Simplification: 7 Changes to Expect
- Changes To Student Loan Planning With The New SAVE Income-Driven Repayment (IDR) Plan
As always, we’ll keep you up to date via the NGPF blog.