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FAFSA Simplification Act

What is the FAFSA Simplification Act? 

The FAFSA Simplification Act is an initiative by the United States Department of Education to make applying for federal student aid easier for students. It represents a significant overhaul of federal student aid, including the FAFSA form, need analysis, storage of federal student aid application data, and many policies and procedures for schools participating in Title IV programs. 

Impact on Students and Families 

The Act is intended to make the Free Application for Federal Student Aid (FAFSA) easier for students and their families. The majority of the changes will be implemented in the 2024-25 award year and are expected to provide families and students with:

  • a more streamlined application process
  • expanded eligibility for federal student aid
  • a new user experience for the FAFSA form
  • Students may see more differences in their financial aid offer starting 2024-25 compared to prior years

Changes to the FAFSA Application

  • The FAFSA will be available December 2023 (not October 1 like in previous years)
  • The number of questions will be reduced
  • Students will be able to list up to 20 schools on their FAFSA via the online application
  • The Student Aid Index (SAI) will replace the Expected Family Contribution (EFC)
  • Anyone asked to provide information on the aid application—student, spouse, student’s parent(s), and/or stepparents(s)—is called a “contributor” 
  • “Contributors'' will need to provide consent to have their Federal Tax Information (FTI) transferred directly from the IRS to the FAFSA application. This direct data share with the IRS replaces the IRS retrieval tool (DRT). If all contributors do not provide consent, the student is not eligible for aid. 
  • The Custodial Parent on your FAFSA will be the parent(s) who provided you with more financial support instead of the parent(s) with whom you lived more during the past 12 months.
  • There will be two-step verification, and all FAFSA contributors must have an FSA ID to log in and complete their portion of the online form. Contributors with a valid Social Security Number can start this process now!
  • Contributors without a social security number will be able to apply for one in December 2023. 
  • Applicants will be asked to report their sex, race, and ethnicity on the FAFSA, but students will be offered a choice of “Prefer Not to Answer.” Schools and state agencies won’t see responses to these questions on the FAFSA.

Changes to the Way We Calculate Your Aid Eligibility  

  • Students and families will see a different measure of their ability to pay for college and experience a change in the methodology used to determine aid.
  • The formula for calculating the Student Aid Index (SAI) is: COA – SAI = financial need.
  • The new need-analysis formula:
    • Removes the number of family members in college from the calculation,
    • Allows a minimum SAI of -$1,500,
    • Implements separate eligibility determination criteria for Federal Pell Grants based on federal poverty levels and family size.
    • Child support received will be included in assets and not as untaxed income.
    • Families who own a small business/farm that also serves as primary residence will now have assets of that business/farm considered in their need-analysis calculation.

How Can I prepare for these changes? 

  • Create your FSA ID and have the contributors create one at least a week before you start your FAFSA application 
  • Gather your Contributors’ (parent(s) and/or student’s spouse) legal name, social security number, birthdate, & email address to invite them to complete their portion of the form. 
  • Ensure all contributors, including yourself, consent to have their federal tax information (FTI) transferred directly from the IRS to the FAFSA. 

CA California Dream Act Applicants

The 2024-25 CA Dream Act Application (CADAA) will include some of the changes from the new FAFSA such as the incorporation of the Student Aid Index in lieu of the Expected Family Contribution. Although the number of questions will not be reduced on the CADAA, the California Student Aid Commission is working on making some enhancements per the recommendations of the Renewing the Dream Report that was released earlier this year. Commission staff are currently analyzing these recommendations and are working towards identifying which recommendations will be implemented for the 2024-25 award year.

The UCSC Financial Aid & Scholarship Office is committed to providing the most up to date information to students and families. We will update this page as we receive more information from the Department of Education.