College Smart Families,
2023 was quite a year. 2024 will be even more exciting as those acceptance letters start rolling in! If you have any friends or families who are looking for the full package of services for the class of 2025 or 2026, please have them book an introductory meeting with us – Book Now.
One unique part of this application season is that the Free Application for Federal Student Aid (FAFSA) was released on December 31st rather than the normal October 1st. This is due to an overhaul of the FAFSA system that will cause some relatively large shifts in the financial aid ecosystem. The most pressing impact is that the financial aid offices of the schools where you’ve applied are going to have far less time than normal to put together their financial aid packages. The exact process will vary school-by-school, but there are situations where schools with limited financial aid budgets will give out financial aid on a first-come first-serve basis, so I’d highly recommend that you get your FAFSA completed sooner rather than later.
The first question that you may be asking is whether you should invest the time to fill out the forms. There is no out-and-out requirement to complete the FAFSA. Many students opt out of doing so entirely. That said, I used the StudentAid.gov Aid Estimator to run a test for a family of four in California with a $300,000 Adjusted Gross Income, with $300,000 in additional assets. Even that family qualified for $7,481 in Federal Student Aid ($5,500 in loans & $1,981 in Work Study Funds). Regardless of your family’s financial situation, you should qualify for the $5,500 in loans, which can be a nice way to build up the student’s credit history as well as deferring some of the payments that the family would otherwise be required to pay over the academic year.
Some other major changes to the 2024-2025 FAFSA include:
- Reduction of questions from around 118 to around 36.
- A direct connection to IRS tax returns to import your data quicker.
- An increase in schools that can be listed to 20.
- Families with small businesses/farms must report their net worth.
- Having additional family members in college no longer matters.
- Transition from using the Estimated Family Contribution (EFC) to the Student Aid Index (SAI). The key piece is that the SAI can go negative while EFC was capped at 0.
One other note as you prepare to fill out the forms is that there’s an approximately 3-5 day waiting period to get your FSA ID, which is the unique identifier that will be used throughout the application process. This is because the initial information must be cross-referenced with the Social Security Administration, so you should get a hop on that straight away!
I’ve included links to some great resources that can help you as you fill out the forms.
Let us know if you have any additional questions. While we are not certified financial planners, we’d be happy to explain the financial aid terms and some basic strategies to consider as you make the financial plans with your family for the upcoming years of college!
Thanks,
Ed & Catherine McCarthy
College Smart Advising 