The Department of Education recently implemented sweeping new changes to the FAFSA form and the related Federal Methodology SAI calculation, which they are calling “FAFSA Simplification.” These are the biggest changes I have seen in my more than twenty years of college planning experience—in my opinion, these changes are not “simplification”; instead, they will result in major confusion and further complexities. The new FAFSA was rolled out right before the end of December 2023, and will affect students applying for college financial aid beginning Fall 2024 (our current high school senior class).
Some of these changes include:
- Replacing the Student Aid Index (SAI) with a new term: the “Student Aid Index” (SAI)
- Changing the formula for calculating the SAI (vs. the SAI), including getting rid of the “more than one student in school” family benefit, plus assessing more business assets that were previously excluded from the Federal Methodology
My analysis of the “new” FAFSA
I do not see much “simplification” at all and sincerely wonder how such a term was settled upon. For example, the new SAI-calculated output will determine eligibility for need-based financial aid, just like the old “SAI” number did. (The previous term was Expected Family Contribution, or “EFC”). In other words, eligibility for financial aid will still be: cost of attendance – SAI (versus EFC) = eligibility for need-based aid. Why change the name?
Further, in my analysis of the changes to the calculated SAI, the new number appears that it will be higher “apples to apples” than the previously calculated EFC for many families; therefore, making some less eligible for need-based aid. For example:
- Assume your family’s EFC was $30K. If you had twins attending college, your federal EFC was split in two: one child had half ($15K) and the other had the other half ($15K). Therefore, if your two students attended a school that costs $30K, each child would be eligible for $15K in need-based aid.
- With the new SAI calculation, the “multiple child in school” benefit is scheduled to be eliminated. As a result, each student would now have a $30K SAI; therefore, neither one is eligible for need-based aid at a $30K school.
Another major change regards treatment of businesses in the Federal Methodology. Previously, if you had a business with fewer than 100 employees, no business information was entered on the FAFSA form. Now it appears business information will be asked for in many more situations than before.
The most amazing thing to me about these new changes is that they only affect the FAFSA and the Federal Methodology—not the Institutional Methodology or the CSS Profile. As of the time of writing, there have been no indications of that methodology or the form changing by CollegeBoard (who is the vendor for this form/methodology), or how it will impact the financial aid eligibility of schools that require the CSS Profile. Remember, the private schools (with lots of free money) that require the CSS Profile are determining eligibility for need-based aid using their process/ form, with no government strings attached. Beginning as early as December 2023, we may need both an SAI and an EFC. How is this going to simplify anything for families planning on college?
To make things even worse, in recent years the FAFSA form has been made available to the public on October 1 for new high school seniors and their families. The new FAFSA was delayed until late December 2023. This is creating even more confusion than in a “normal” year.
Please double-check what the current situation is for each college your student has applied to, get informed, and plan accordingly. Despite all of this, the fundamental idea of finding the most free money from your right schools (solving your matrix) as presented throughout this blog does not change.
