Recommendations for Higher Ed Institutions to Prepare for the New FAFSA

Carnegie Higher Ed Jun 21, 2023 Carnegie Higher Ed Persona The Visionary Frontrunner

The Department of Education recently announced that the new 2024–2025 Free Application for Federal Student Aid (FAFSA) will be available in December instead of the usual October 1. This has added considerable uncertainty as institutions prepare for potential changes to student aid eligibility and adjust dates and deadlines, especially for prospective undergraduate students.

Over the past few years, colleges and universities have taken advantage of the FAFSA’s October 1 availability and the shift to prior-prior-year income information. This allowed schools to move deadlines, communication campaigns, and even award letter notifications into the fall and early winter. Now those same institutions are facing an adjustment that feels like a return to the pre-2015 days when the FAFSA was available starting January 1 and spring was a frantic sprint to collect and process data, communicate aid eligibility, and counsel students and families.

On the Financial Aid Optimization team at Carnegie, the conversation we have most frequently with our partner institutions is: What can we do now to be ready for the new FAFSA, and what resources are available to clarify what will change, for which students, and when? How can we communicate to students and families or adjust our processes when we still aren’t certain when the FAFSA will be available? 

Here’s what we’ve learned from our own review and analyses along with lessons learned so far from our client institutions and formal guidance from the Department of Education and the National Association of Student Financial Aid Administrators (NASFAA) to help you develop a six-month road map to readiness for the new FAFSA. For a broader overview of the new Student Aid Index (SAI) and more general information about the changes, see our blog from February 2023 here

 

What can you expect from the new FAFSA?

The delayed rollout of the new FAFSA has also delayed updates to student information systems, data file specifications, and other critical items required for FAFSA processing. This uncertainty is definitely frustrating, but there are several pieces of good news about the new FAFSA:

  1. The new FAFSA will have significantly fewer questions for many families and will ease data sharing directly from the IRS for applicants who are required to provide tax information. A more concise FAFSA and easier data transfer means fewer complications for students and families, which could mean less confusion and lower contact volume for your financial aid office. 
  2. Based on the new application form, analysis of student-level data, and resources like the NASFAA student case studies, the new FAFSA will result in expansion of need-based federal grant aid to some students and will make other students newly eligible for federal grant aid. 
  3. The change to permit the Student Aid Index (SAI) to be slightly negative for students and families with the greatest financial need will make these students potentially eligible for additional financial aid (whether it’s grants, loans, or work-study). 

While these and other provisions of the FAFSA Simplification Act are clear positives for students and families, there are still looming challenges. The Department of Education has not committed to an availability date for the new FAFSA, apart from indicating that the implementation is “on track” for a December 2023 release. Colleges and universities, nonprofit educational access and advocacy organizations, and many states have spent the last seven enrollment cycles building communication campaigns designed to encourage and incentivize early FAFSA completion based on an October 1 availability. 

Additionally, while some students will become eligible for additional aid and many other students will see little to no change to their eligibility, dependent students with at least one sibling also enrolled in a postsecondary institution during the 2024–2025 academic year may see a reduction in aid eligibility based on the exclusion of the “number in college” criterion from the SAI calculations. Some students will lose partial or complete Pell Grant eligibility based on this change. For new prospective students without siblings in college, this change won’t be nearly as disruptive (since the new FAFSA and SAI may be the only aid application the student and family know), but continuing students who are impacted may face significant changes to their aid eligibility. 

Planning your road map to the new FAFSA

Knowing the new FAFSA will change aid eligibility for some of your students—and with the uncertainty about the availability of the new application requiring some potential adjustments to dates and deadlines at your institution—what’s next? You have six months until the new FAFSA is available. The schedule below lays out actions your team can take over the summer and fall to ensure you’re prepared. 

June–August 2023

  • Utilize the NASFAA Modeling Tool to develop a student-level understanding of the changes from the new FAFSA and SAI. 
  • Using the outputs from the NASFAA Modeling Tool, work with internal teams and/or your financial aid optimization partners to assess the potential impact on both institutional gift aid strategies and federal aid eligibility. 
  • Prepare communication plans for all ’24 prospective and continuing students that are flexible to accommodate potential changes in FAFSA availability, but give families some clarity on what to expect and when. 
  • Utilize the resources noted below to train financial aid staff at your institution on FAFSA changes, but extend this training to admission staff and other key members of your teams who will communicate with students and families. For staff members outside of financial aid, concentrate training on non-technical impacts on student eligibility and key questions that are likely to come from prospective students and families.  

September–November 2023

  • Begin communicating more concrete details to students and families (both new and continuing), particularly if the FAFSA availability date is known by this time. Provide clear dates and deadlines to ease confusion. 
  • Finalize any adjustments to institutional gift aid strategies based on analysis of student-level eligibility data. 
  • Communicate actively with your information technology colleagues and partners that provide or support key systems (e.g., student information systems, admission CRMs) to ensure that you clearly understand the timelines for implementation, testing, and “go-live” for the new FAFSA. Recognize that all parties (ED, state grant administrators, vendors, institutions) are adjusting and that delays and service interruptions are inevitable. 

What resources are available to build knowledge and capacity at your institution and get ready for the new FAFSA?

  • NASFAA hosts a series of resources—many of which don’t require a membership—including case studies, an implementation checklist, and charts breaking down key changes. In our view, the most critical resource is the Student Aid Index Modeling Tool, which does require a NASFAA membership to download but provides direct comparisons of student-level EFCs to SAIs and associated Pell eligibility based on information the institution provides from current ISIRs. When assessing student impact, there’s no substitute for this direct comparison. 
  • Federal Student Aid (FSA) at the Department of Education has organized information related to FAFSA Simplification in a Knowledge Center (particularly the Resources link), which is frequently updated. While Federal Register Notices, Dear Colleague Letters, and Electronic Announcements are usually relatively technical, there are several resources written for non-aid professionals, including notices about compliance, eligibility, and other regulatory matters (like the April 2023 letter to members of institutional leadership). Additionally, the Resources page includes links to training resources (both technical and non-technical) and a series of summer webinars available both live and recorded. 
  • Lastly, if you’re working with a partner for financial aid optimization, ask them about opportunities to assess the impact of FAFSA changes to student populations, institutional gift aid strategies, and key dates and deadlines. 

Our Financial Aid Optimization team has a breadth of experience to help you navigate this change. Want to talk to our team about your financial aid questions or concerns? Start a conversation!

 

This blog was brought to you by Mike Keane, Senior Vice President of Modeling & Client Strategy, and David Wuinee, Vice President of Client Strategy.

Never miss an update.


Carnegie announces the acquisition of Fire Engine RED's Student Search service.

X