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Choosing the right college to attend after all those years of hard work in high school is stressful enough. Still, as life does, many students were thrown a bit of a curve ball as delays with this year’s FAFSA financial aid offers has temporarily prevented them from taking the next step in their educational future. It is frustrating, but the federal government is working to rectify the problem. The delays were due to the time it took to roll out the changes instituted with the FAFSA Simplification Act. Many college admissions offices altered and extended their timelines to allow students time to receive and make decisions based on their offers.
Are you one of those students affected by the FAFSA delay? Here are a few tips for taking control of your college choices and weathering the storm:
- Don’t get stressed out or overwhelmed. You are not alone. The delays are affecting many other students as well.
- Communicate with the colleges and alert them that you are having delays with your FAFSA application.
- Check periodically for updates and instructions from college financial aid offices.
- Don’t panic. Be patient and review the financial aid offers as they arrive. Communicate with family and a financial professional.
The FAFSA Simplification Act is an overhaul of the processes and systems used to award federal student aid, beginning with the 2024-25 award year.
According to the FAFSA website, the primary changes required by the law include:
Replacing the Expected Family Contribution (EFC) With the Student Aid Index (SAI)
Students and families will see a change in the methodology used to calculate aid and a different measure of their ability to pay for college. The updated analysis no longer includes the number of family members in college, allows a minimum SAI of -1500, and implements separate criteria to determine Federal Pell Grant awards.
Modifications to Family Definitions in FAFSA Formulas
Proposed changes in how a student’s family size is determined, aligning more with what was reported on the student’s/parent’s tax returns.
Expanding Access to Federal Pell Grants
- The Federal Pell Grant will be expanded to more students and will link eligibility to family size and federal poverty level (beginning in the 2024-25 award year).
- For students whose school closed while they were enrolled or if the school is found to have misled the students, the Federal Pell Grant lifetime eligibility will be restored (beginning in the 2023-24 award year).
- Incarcerated students in state and federal prisons will again be eligible to receive a Federal Pell Grant (beginning in the 2023-24 award year).
Streamlining the FAFSA Form
Starting in 2024-25, data used directly from the IRS will be part of calculating Federal Pell Grant eligibility and the SAI. The new changes also remove questions about Selective Service registration and drug convictions. There is also the additions of questions regarding applicants’ sex, race, and ethnicity, which won’t impact the federal student aid eligibility (starting with the 2023-24 award year).
Consult a financial professional
When deciding which school to attend and juggling your FAFSA offers, consider consulting a financial professional to learn how the federal loan payback program works so there are no surprises upon graduation. According to Education Data Initiative, about 20% of all American adults with undergraduate degrees have outstanding student debt, and 8% of adults who took out student loans reported they were behind on their payments.
However, you don’t want to be one of the students who finds themself in default, which will adversely impact your credit score. You also don’t want to pay just the minimum payment, for example, on an income-driven repayment (IDR) plan that isn’t enough to cover the interest and the unpaid interest that accrues and increases your balance.
A financial professional can work with you to recognize the impact of your financial decisions and how they might impact you. This is a big step in your life as a student or your child if you are a parent, and with careful analysis and decision-making, you may be able to save money and address stress before it appears. So, be patient and wait for your offers to arrive and make a choice not just for today, but decades from now. Be transparent about your wishes and concerns and communicate with your school and family.
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
Sources:
What is the FAFSA Simplification Act? | Federal Student Aid
FAFSA Delays Will Push Back College Financial Aid Timeline | Money
FAFSA: What’s happening with 2024 college financial aid? | CNN Politics
Student Loan Debt: 2023 Statistics and Outlook (investopedia.com)
Student Loan Debt Statistics [2024]: Average + Total Debt (educationdata.org)
This article was prepared by LPL Marketing Solutions
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