Maria, who sat across from me, had been a high school guidance counselor for three decades and had seen almost everything when it came to guiding students through the notoriously onerous FAFSA (Free Application for Federal Student Aid). “I’ve been doing this for years, but I’ve never seen such a dramatic shift in the system. It’s like comparing a rotary phone to a smartphone,” she muttered as she carefully examined the new form sheets.
What Maria said was not exaggerated. The FAFSA Simplification Act, the most significant revamp of federal financial aid in decades, was signed into law by the Consolidated Appropriations Act of 2021. This statute drastically alters how millions of students apply for any type of college financial aid.
Many observers complained about the cumbersome form, discouraging reports that an estimated 2 million qualified students did not apply for aid each year. Now that Congress has finally awakened to streamline the process.
For one month, I have been interviewing financial aid administrators, education policy experts, high school counselors, and families who are coping with the new financial aid system. The experiences gathered from these stakeholders evince a financial-aid landscape shifting towards greater accessibility, but still riddled with significant implementation challenges.
The birth of a simpler FAFSA
The original FAFSA was created in 1992 to standardize the process by which a student applies for federal financial aid. However, over the years, the application became more complicated, eventually making its way to over 100 questions that asked the minute details of family finances.
“The old FAFSA was a deterrent disguised as an application,” said Dr. Robert Kelchen, a higher education finance expert I met with in his university office. “Research consistently showed that lower-income families, first-generation college students, and non-native English speakers were disproportionately discouraged by its complexity. Many simply gave up, leaving billions in aid unclaimed each year.”
Around 2015, that movement for simplification gained serious traction after Dr. Susan Dynarski of the University of Michigan demonstrated through her research that two questions were enough to explain 90 percent of the variance in Pell Grant eligibility. This discovery gave forward momentum for a bipartisan push for reform, culminating in the passage of the FAFSA Simplification Act in December 2020.
An Implementation Timeline- Phased Approach
The rollout of simplified FAFSA has not fetched some hiccups. Originally, the full implementation was meant to be in the awards year of 2023-2024; however, changes announced by the Department of Education pushed the timeline back.
“Transforming a system this complex isn’t like flipping a switch,” said James Martinez, a Department of Education official I spoke to over the phone. “We’re basically rebuilding the engine of financial aid while the car is still going. Careful phasing is uh, required to avoid disruptions in aid delivery.”
The pass implementation schedule is as follows:
- Initial Changes; Removal of Selective Service and Drug Conviction Eligibility Criteria: 2021-2022
- Next came a year of operational, behind-the-scenes technical preparation and stakeholder engagement for 2022-2023.
- An initial limited implementation of certain provisions is planned for 2023-2024, with a full implementation of the simplified FAFSA expected for 2024-2025.
Many educators were outraged by the postponed launch, but others recognized its importance. Tina Johnson, the financial aid director of a community college in Oregon, told me when I visited her tiny office crammed with financial aid pamphlets, “I would rather they get it right than rush into things and cause chaos for students.” The stakes are simply too high for millions of families.
Changes to Core: What’s Different in New FAFSA
Seated at the kitchen table, surrounded by all sorts of college brochures, Dana Williams, mother to twin high-school seniors, showed me both versions of the form side-by-side. “The difference is night and day,” she noted while pointing to the significantly shorter new version. “This actually feels like something I could do without taking a week off work.”
Simplified FAFSA has several important changes:
Fewer Questions, Faster Completion
One of the most radical changes would be the drastic reduction in form lengths. With the new FAFSA, 108 questions were trimmed to 36 asking the critically important question about information needed for determining eligibility for aid.
So for the Williamses, the previous form completion time will save them approximately ten minutes as opposed to 45 minutes before. For students with the more complicated family situations, this time would have been even more significant.
According to Martinez, “There were questions taking up unnecessary complexity without making aid more focused.” For example, lower-income families asking about their assets would get questions that create a load on them, but for most, none of that changes their aid eligibility.
This streamlining spreads to the process of collecting data. The improved Data Retrieval Tool of the IRS will now populate tax information automatically for applicants and their parents filing federal tax returns, bypassing the manual entry of financial data that-previously, was a major cause of errors and verification delays.
Student Aid Index:
Declaring Membership into the Clan of Family Contribution
One of the most far-reaching conceptual shifts constitutes the displacement of the Expected Family Contribution (EFC) by the Student Aid Index (SAI).
“The phrase ‘Expected Family Contribution’ was always fraught with difficulty,” says financial aid guru Mark Kantrowitz at a recent higher education conference. “Families looked at that number and figured that was what they were expected to pay, whereas in actuality it was just an eligibility index. So the new terminology is more correct.”
The SAI still performs essentially the same function of measuring a family’s financial capacity, but with very important technical refinements that enhance fairness.
The formula now reads:
Safeguards more earnings for low-income families by increasing Income Protection Allowances Eliminates the penalty for families with more than one student in college (the ‘sibling discount’) Permits negative SAI values down to -$1,500 previous minimum EFC was zero, thus helping with the identification of the most financially needy students Adjusts how certain types of income and assets are integrated within the calculation.
For Dana Williams and her twins, changes in a system will now have some real financial repercussions. “In the old system, having two children in college at the same time would have severely cut back on our EFC,” she pointed out, adding in further concern. “That advantage is now gone, meaning we are looking at quite potentially higher expected contributions.”
Increased Pell Grant Eligibility
While the new system will create changes in expected contributions for some households, it will vastly expand access to Pell Grants-the cornerstone provision of federal assistance for low-income students.
The bill opens up new pathways to maximum Pell eligibility based on family size and altered adjusted gross income as compared to federal poverty guidelines. Students whose families receive means-tested federal benefits such as SNAP or Medicaid will automatically qualify for maximum Pell Grants without having to furnish specific detailed financial information.
“This approach recognizes that if a family already qualifies for federal poverty programs, we don’t need to reassess their financial need through a separate process,” said Dr. Kelchen. “It’s both more efficient and more dignified.”
Estimations suggest the number of students who become eligible under the new formula and are estimated at 1.7 million additional students for the Pell Grant will dramatically increase the award amount for many currently enrolled students.
Impact on Families: Winners and Adjustments
The simplified FAFSA will affect families very differently depending on their particular circumstances. Conversations held with families and aid administrators across the nation highlighted some clear patterns as to who benefits the most from the changes, and who may have to adjust.
Widened Access for Low-Income and Nontraditional Students
For Jasmine Carter, a single mother of three working full-time and going to a state university, the simplified FAFSA comes as a welcome relief. “The old form asked questions about my ex-husband’s finances that I had no way of answering,” she said while meeting at a campus coffee shop. “I almost gave up twice during the process.”
The new system means that Jasmine, based on her income and family size, automatically qualifies for the maximum Pell Grant without having to provide detailed financial information. The simplified form also accommodates nontraditional family structures, including homeless students, students in unusual dependency situations, and the like.
Financial aid administrators are especially pleased to see these questions concerning drug convictions and Selective Service registration eliminated, as they provided barriers for so many students without any assistive benefits for targeting aid.
“Those questions weren’t about need in dollars, but rather policing behavior,” said Marcus Stevenson, financial aid director at a historically black college in Georgia. “Their removal helps reposition financial aid for its core purpose-making college affordable on the basis of economic circumstances, not past mistakes.”
Middle Income Adjustments-Mixed Results
For the middle-income family, however, it is a much more mixed bag. The removal of the multiple-student discount could therefore mean higher expected contributions for such families in which there are two or more children attending institutions simultaneously. On the other hand, increased Income Protection Allowances would serve many of the moderate-earning households by sheltering more of their income from calculations in aid eligibility.
“It’s not that simple as saying middle-income families win or lose under the new system,” cautioned Kantrowitz. “The outcomes depend on what specific family circumstances, income sources, and asset distributions come into play. Some will see increased aid eligibility while others may see reductions.”
For the Rodriguez family living in suburban Chicago, whom I met during a financial aid workshop, these changes create a planning challenge. As they had expected three children to reach college within four years, they were looking forward to the sibling discount making their contributions manageable.
“We’re having to rethink entirely how to approach college savings,” Carlos Rodriguez said, referring to the activities undertaken while looking over worksheets of preliminary aid estimates. “The schools we thought were going to be affordable might not be anymore. It’s forcing some difficult conversations about priorities.”
Implementation Challenges: A Rocky Rollout
While the new application process was intended to be pretty streamlined, the implementation of the simplified FAFSA ran into rather profound challenges. The Department of Education’s delayed launch of the 2024-2025 form—which became available toward the end of December 2023, almost three months past the typical October 1 release—created cascading problems for the entire financial aid cycle.
“The delayed form created a compressed timeline that is putting enormous pressure on everyone,” commented Samantha Wright, a high school counselor in rural Minnesota with whom I spoke via video call. “Students have less time to complete the FAFSA before college deposit deadlines, and financial aid offices have less time to process applications and issue aid packages.”
Technical Glitches and System Strains
Timing troubles are just one of many technical problems that have hindered the scheduling. Error messages, system timeouts, and issues for families creating the new FSA ID for students and contributing parents were all reported by many families.
“It’s been a lot of frustrations,” Jennifer Chang, the mother of the high school senior, admitted to me when I called to find out how she was doing with the form. “We’ve been trying to fill out the form four different times, and every single time we hit different technical roadblocks. It’s taking even longer than for the old one because of the particular system issues.”
The problems have been especially harsh on non-English-speaking families and for families with complicated citizenship issues. Launching the Spanish language version of the form was further delayed, and some mixed-citizenship families mentioned they had been confused by new requirements for contributor permissions.
“We’re seeing lower completion rates among our immigrant families,” college advisor at predominantly Hispanic high school in Texas Elena Vasquez said. “The technical barriers are exacerbating existing equity gaps within the financial aid process.”
Institutional Adaptation: Colleges Lagging Behind
Colleges and universities have been somewhat slow in adapting their systems and processes to accommodate the new formula in the way it affects the timeline.
“We’re basically rebuilding our entire financial-aid-awarding structure in the midst of the year,” David Thompson, financial-aid director at a private liberal arts college in New England, said, showing me spreadsheets of recalculated aid packages. “The formula changes mean we need to recalibrate our institutional aid methodologies while dealing with an accelerated processing timeline simultaneously.”
Many institutions have delayed their financial-aid notification dates, creating stress for students comparing offers before deciding on enrollment. Other schools have also cited difficulty inputting the new SAI into their existing systems, which has caused delays in award packaging.
The Future of Financial Aid Access
Most specialists are optimistic the new ideas will prove to be a beneficial force in the long haul regardless of their implementation challenges.
“We need to make a differentiation between transition issues and structural improvements,” stated Dr. Kelchen.
“The rollout problems are real but are temporary. The simplified form and expanded Pell eligibility are permanent enhancements to access for aid that ultimately, once the system stabilization has occurred, will benefit millions of students each year.”
This foundation is being built upon by education advocates who are proposing further reforms. The proposals currently under discussion include:
- Continuing addition of automatically zero SAI eligibility based on program participation
- Modifications to asset protection allowances taking the family savings needs into account
- Developing more sophisticated methodologies for assessing dependency status
- Improving arrangements for families subjected to variable incomes or with odd financial conditions.
“FAFSA Simplification Act is a base level, not a ceiling, for financial aid reform,” Congressman Bobby Scott, whose presence I witnessed at a press conference on Capitol Hill. “We will continue to be looking at implementation and the outcomes to see if there are any other opportunities to improve.”
The Bigger Picture: Beyond Form Simplification
While reducing application complexity is certainly important, experts emphasize that form simplification alone cannot address the broader issue of affordable college access.
“A simpler form helps more students access available aid, but doesn’t solve the basic problem of the fact that available aid hasn’t matched up to college costs,” Dr. Sandy Baum, an economist in higher education, warned while speaking to HER. “We still need to have serious conversations about increasing federal and state investments in higher education affordability.”
For students like Marcus Jefferson, first-generation college prospect I met at a community college information session, those more macrolevel issues are more pressing. “Yes, it does help with the easy application,” he agreed, “but I still have to borrow a lot with grants. The simplicity really doesn’t change the basic maths of affordability.”
| Feature | Old FAFSA | New FAFSA |
|---|---|---|
| Number of questions | 108 | ~36 |
| Completion time | ~45 minutes | ~10 minutes |
| Minimum contribution value | 0 | -$1,500 |
| Multiple student discount | Yes | No |
| Automatic maximum Pell eligibility for benefit recipients | No | Yes |
| Drug conviction questions | Yes | No |
| Selective Service requirement | Yes | No |
FAQS:
When does the simplified FAFSA version take effect?
Although the full simplified FAFSA was set to go into effect in the 2024-2025 aid year, certain provisions were implemented earlier.
What is the new FAFSA question count?
It has approximately 36 questions, reduced from the previous version’s 108.
What replaces Expected Family Contribution (EFC)?
The Student Aid Index (SAI), which serves the same basic function but with important formula modifications.
Will I need to create a new FSA ID?
Yes, under the new format, both students and parents/guardians who contribute will need an FSA ID.
How are multiple-student discounts affected?
The “sibling discount” is gone. Families with multiple college-going students will no longer receive a reduce in their expected contribution automatically.