Changes to the FAFSA are on the way. There are some real positives to these changes. Notable adjustments include reducing the number of questions on the form and expanding Pell Grant eligibility for families with the largest amount of financial need. However, the one change that seems to be getting the most press these days is not necessarily a good one. The EFC is being effectively replaced with the new Student Aid Index, and a long-standing discount to families with two children in college at the same time is being eliminated with this revision to the FAFSA.
How it works currently:
Currently, the EFC (Expected Family Contribution) is a formula that college financial aid staff use to determine how much financial aid a family receives. The formula considers a family’s income, assets, and benefits to calculate how much financial aid a family is eligible to receive. Also included in the current calculation is the number of family members who will attend college or career school during the year.
As you can see in the table above, multiple children in school at the same time has a dramatic impact on reducing a families EFC, which traditionally makes these families eligible for more financial aid.
What’s changing with the student aid index?
The Student Aid Index will use a similar formula to the EFC. Like the EFC formula, it will also consider a families income, assets and benefits to calculate how much financial aid a family is eligible to receive. The major difference here is that the number of family members attending college during the year is not part of the new formula.
This creates extra challenges for families with two children in college at the same time:
As you can see, this creates an obvious funding issue for families with two children in college at the same time. There is a glimmer of good news with these changes. That is that they’ve been delayed until the 2024-2025 academic year. For families with two in college at the same time, they will continue to receive the EFC reduction until that timeframe. This gives families a bit of time to digest these changes, but will likely create problems for many families at that point.
Do you have questions about how these upcoming FAFSA changes may affect your college funding plan? Click here to schedule a call to discuss.
All the best,
Andrew Holmes, Certified College Planning Specialist™
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