Demystifying FAFSA Simplification

Big changes are on the horizon for students at the Community College of Denver (CCD), thanks to the Free Application for Federal Student Aid (FAFSA) Simplification Act, which was passed by Congress in 2020. With the upcoming launch of the 2024-2025 FAFSA application, the financial aid process is about to become simpler and more accessible for students nationwide.

The best part is it will be shorter and more user-friendly. One of the most significant improvements is the reduction in the number of questions on the FAFSA. The FAFSA, which previously contained a daunting 108 questions, will now consist of just 46 questions. Additionally, the new FAFSA is dynamic, meaning that some students may not even need to answer all 46 questions. This streamlined format is designed to simplify the application process, making it less intimidating for students and their families. This change is sure to be welcomed by perspective and current CityHawks seeking financial aid. In this article, we'll explore the key changes introduced by the FAFSA Simplification Act and what CCD students can expect.

Available in Multiple Languages

Until now, the FAFSA has been available in English and Spanish. However, starting with the 2024-2025 application, it will be expanded to include the 11 most common languages spoken by English learner students and their parents. This expansion will ensure that a more diverse group of students can access the financial aid they need, creating a more inclusive application process.

IRS Direct Data Exchange Requirement

Previously, FAFSA applicants had the option to manually enter their tax information or use the IRS Data Retrieval Tool. However, starting in 2024-2025, all FAFSA applicants will be required to provide consent for the Department of Education to receive tax information directly from the IRS. This change simplifies the FAFSA process for most applicants, as their tax data will be automatically transferred into the application. Manual entry will only be necessary in a very small number of cases.

Introduction of "Contributors"

A new term introduced in the 2024-2025 FAFSA is "contributors." Contributors are individuals required to provide information on a student's form, such as parents or stepparents. A student's or parent's responses on the FAFSA will determine which contributors, if any, need to provide information. Contributors will receive an email notifying them of their status and will need to use their own FSA ID to provide the required information. Being a contributor doesn't imply financial responsibility for the student's education costs but is necessary to complete the FAFSA and be eligible for federal student aid.

The Student Aid Index (SAI) Replaces Expected Family Contribution (EFC)

The 2024-2025 FAFSA introduces the Student Aid Index (SAI) to replace the Expected Family Contribution (EFC). The SAI is a more accurate representation of the number used to determine aid eligibility and may be a negative number, down to -1500. This terminology change simplifies the aid calculation process and provides a clearer picture of students' financial needs.

Students and families will see a different measure of their ability to pay for college and will also experience a change in the methodology used to determine aid. The new formula removes the number of family members in college from the calculation and allows a minimum SAI of negative $1,500 to give financial aid administrators more insight when making determinations for students with especially challenging situations.

More CCD Students Eligible for Pell Grant

The FAFSA Simplification Act expands the Federal Pell Grant to more students and links eligibility to family size and the federal poverty level. Some applicants will be able to determine Pell Grant eligibility prior to enrolling in college based on their family size, household income, and state poverty standards.

Pell Grant eligibility will be determined in three steps:

1. Maximum Pell Grant | Applicants may qualify for a Maximum Pell Grant based on family size, adjusted gross income (AGI), and poverty guidelines. Students qualifying for a Maximum Pell Grant will have an SAI between negative $1,500 and $0.
2. Student Aid Index (SAI) | Applicants who do not qualify for a Maximum Pell Grant may still qualify if their calculated SAI is less than the maximum Pell Grant award for the award year. The applicant’s Pell Grant award for full-time enrollment will be equal to the maximum Pell Grant for the award year minus SAI. The Pell Grant will be adjusted if the applicant enrolls less than full-time or if the applicant’s COA is less than the calculated Pell Grant award.
3. Minimum Pell Grant | Applicants whose SAI is greater than the maximum Pell Grant award for the award year may still qualify for a Pell Grant based on family size, AGI, and poverty guidelines.

Expanding access to federal aid, the FAFSA Simplification Act expands the Federal Pell Grant to more students and links eligibility to family size and the federal poverty level. Some applicants will be able to determine Pell Grant eligibility prior to enrolling in college based on their family size, household income, and state poverty standards.

Here's what the formula looks like

The need analysis formula will remain: cost of attendance (COA) minus Student Aid Index (SAI) and other financial assistance equals eligibility for need-based financial aid.

Changes in Parent Responsibility for Divorced or Separated Students

For dependent students, the FAFSA previously required financial information from the parent(s) the student had lived with the most in the last 12 months. However, with the 2024-2025 FAFSA, financial information will be needed from the parent(s) who provided the most financial support to the student. This change aims to simplify the process for students with divorced or separated parents.

When to Submit the FAFSA

Despite the fall semester starting in August, it's crucial for CCD students to start their new financial aid application as early as January 1st each year. This ensures you have the best chance of receiving the financial aid you need to support your education.

In conclusion, the FAFSA Simplification Act and the changes it brings to the FAFSA application for the 2024-2025 aid year are designed to make the financial aid process more accessible and streamlined for students at the Community College of Denver. These changes, including a shorter and more user-friendly FAFSA, availability in multiple languages, and the introduction of the Student Aid Index (SAI), are all aimed at making it easier for students to secure the financial assistance they need to pursue their educational goals. So mark your calendars and be ready to submit your FAFSA as early as January 1st to ensure you're on track to receive the aid you deserve.

Visit www.ccd.edu/paying-for-college to learn more about how CCD is helping students pay for college with little to no debt.