As we said goodbye to 2020, Congress was working diligently to pass a new spending bill that primarily focused on COVID virus spending. In addition to the COVID items, some Higher Education items were added. The FAFSA Simplification is included in the Consolidation Appropriation Act of 2021. FAFSA Simplification has been a discussion topic for the past few years under both the Obama and Trump administration.
The reason for these changes to be included in a spending bill is these items are directly related to the funding of Higher Education. This is not that unusual. All of these changes are planned to go into effect for the school year 2023 which will be for FAFSA submission on October 1, 2022. From a planning standpoint, current high school sophomores will be the first-year students affected by these changes and FAFSA filers using the tax year 2021.
Here is a quick list of the major changes. A more detailed description of FAFSA Simplification is available in another article.
FAFSA Simplification Items included in the Consolidated Appropriation Act:
- Expected Family Contribution or EFC will be called Student Aid Index or SAI
- Increased automation of IRS and Dept of ED data sharing under the Future Act
- Pell Grant amounts will be calculated outside of the Student Aid Index (SAI)
- Pell Grant calculation is simplified and based on income, poverty level and family size only
- New Pell Grant rules will allow for more people to qualify
- SAI can now be a negative number up to -$1,500. EFC’s lowest amount was 0.
- Selective Service Question will be eliminated
- Drug Conviction Question will be eliminated
- Students of divorced/separated parents will need to use the parent who provides the most amount of financial support
- Simple Means Test will move up an income of $60,000 and below
- Elimination of Subsidized Usage Limit Applied (SULA)
- Easing of financial aid rules for Incarcerated Students
- Expansion of Financial Aid Office Professional Judgement Rules
- Expansion of Provisional Independent Student Status
- Additional Requirements in the Cost of Attendance Rules
FAFSA Simplification in the Consolidated Appropriation Act Summary
The Consolidated Appropriation Act of 2021 is a large bill that is over 5,500 pages. We are expecting adjustments and modifications as implementation begins. With the FAFSA simplification aspects, these changes will not start until the FAFSA submission in October 2022.
As of this date, we have not have seen the revision of the Higher Education Act which was scheduled for renewal in 2008. This too could lead to more changes in the financial aid process and more FAFSA Simplification items.