15 Tips for the 2024 FAFSA
As you may be aware, the FAFSA Simplification Act is generating new changes for the FAFSA for 2024-2025. While the FAFSA typically is available every year on October 1st, it will be released this year sometime in December. The FAFSA is the application required to apply for need-based federal aid. Here are some other things that you need to know:
1) If you already have a student in college or have filed before, you will have the option to "renew" the FAFSA, but you may feel like you are starting over since the format and formula have changed.
2) If you are new to the financial aid application process, the first step is to create an FSA ID. You need to do this before you can begin working on the FAFSA. Even though the FAFSA will not be available until December, you can request the FSA ID now.
3) The student and at least one parent (now called "contributor") will need an FSA ID. You will need an email address to create the student FSA ID. Use a personal email, not a school email address, since your school email address will expire after high school graduation, and you will need to apply for financial aid each year you are in college.
You will need to know the parent and student’s full legal name, date of birth, and Social Security Number. Either student or parent can begin working on the FAFSA once the FSA IDs have been created.
4) There will be a parent wizard that will launch in fall 2023 to help you determine "Who is the parent" for the purpose of the FAFSA. Tax filing status will determine who needs an FSA ID – at minimum, it is the student and one parent (contributor). If parents are married and filing jointly, only one contributor will need an FSA ID. A second parent can be invited by the first parent contributor if needed.
If you are married and filing separately, both parents will need an FSA ID. There is only one FSA ID per person, so even if the parent(s) have more than one student in college, the parent/contributor FSA ID is the same.
5) If parents are not married, the form will ask which parent provided more financial support over the past 12 months. If financial support is evenly split, the form will ask about the parent with greater income or assets. If that parent is remarried, information will also be asked about the stepparent. Name, SSN, and email address will be needed for parent(s).
6) Have a copy of your tax returns with you when you are completing the FAFSA. Some information will be automatically transferred into the application from the IRS through the new Direct Data Exchange (DDX), but some information you will need you supply.
7) You must provide consent to allow your federal tax information to be directly transferred from the IRS via the Direct Data Exchange (DDX). Each person who contributes to the FAFSA will need to provide consent. There will be a manual opportunity to enter tax return data if the parent's marital status or filing status has changed since the last tax return.
Keep in mind that the questions and answers that are automatically populated from the DDX will not appear on the computer screen or the Submission Summary, so don’t expect to see the information that is being transferred over on the FAFSA form.
8) Remember that the FAFSA uses prior prior year tax data. If the student is enrolling in college in 2024, you will complete the FAFSA in 2023 using 2022 data. The FAFSA must be updated every year.
9) You will now be able to list up to 20 colleges at a time on the web version. If you are using the paper application, the limit is still 10. You can add/update schools once you receive your Student Aid Report. Here is how.
10) The FAFSA will ask for current assets – cash/checking/savings and investments, including real estate. The annual amount of child support received is now included as an asset.
Retirement accounts should not be included in the investments section. Money contributed to a retirement account in the tax year being used is assessed in the formula under the untaxed income section. There is no longer an exclusion for a family business or family farm.
11) The new formula calculates a Student Aid Index (SAI) rather than the old Expected Family Contribution (EFC). This SAI is used to determine eligibility for federal financial aid.
12) The form will ask how many students you have in college but the new formula will not factor this into the calculation, so families with more than one student in college will see a significant change in their SAI (formerly EFC) as a result.
13) Each college has its own deadline for submitting the FAFSA, which is often tied to the application plan selected. The earlier you submit, the better, as many schools and states award aid on a first-come, first-served basis. Financial Aid expert Mark Kantrowitz claims that students who file the FAFSA in the first three months tend to get twice as many grants as those who file later. This year, early financial aid deadlines are likely to be pushed back due to the later release of the new FAFSA.
14) If you plan to file the FAFSA and the school(s) to which you are applying also require the CSS Profile, you will need to submit both forms to be evaluated for financial aid. The FAFSA gives access to federal aid, while the CSS profile gives access to institutional aid. The student will appear “incomplete” if one form is submitted and not the other, and they have indicated in the application that they wish to be considered for financial aid.
15) The main differences between the FAFSA and the CSS profile? The FAFSA is free, while the CSS profile costs $25 for the initial application and $16 for each additional report. The CSS profile digs a bit deeper into your financials, so in addition to your federal tax returns, be prepared with your W-2 forms and other records of current-year income, untaxed income and benefits; assets; and bank statements.