FAFSA Simplification Pushed Back 1 Year

Facebook icon Twitter icon Print icon Email icon

By Kathryn Flynn

June 14, 2021

The Department of Education announced that upcoming FAFSA simplification changes will be delayed. They will not release a new FAFSA on October 1, 2022 as originally scheduled. Implementation will now happen in phases, with the first items affecting the upcoming school year.

A Phased Approach to Implementation

FAFSA simplification is scheduled to begin for the 2021-22 award year and continue through 2024-25. While the majority of changes will be delayed, some updates are happening ahead of schedule.

According to Federal Student Aid (FSA), a phased approach was necessary to complete the FAFSA simplification. Given the extensive changes that will be made to processes and systems, a longer timeline is more realistic. This includes replacing their Central Processing system and acquiring a new interface to automatically transfer tax information from the IRS. States and educational institutions that use FAFSA data to award financial aid will also have to adapt to the new rules.  

The new, phased schedule will allow FSA to “manage the developmental timelines, process and guidance updates, and communications requirements generated by these extensive guidelines.” FSA will continue to provide federal student aid without disruptions.

FAFSA Simplification Changes Happening Now

Students completing the FAFSA for the upcoming 2021-22 school year will be affected by a few initial changes. These initial updates include:

  • Subsidized Usage Limit Applies (SULA) rules are no longer in effect.
  • Male students no longer have to register for Selective Service to qualify for federal financial aid.
  • The FAFSA will not ask students about prior drug convictions.

However, the questions have not yet been removed from the FAFSA. Students are to refer to guidance from FSA on how to proceed.

FAFSA Simplification – Delayed Items

The Department of Ed expects to complete FAFSA simplification in time for the 2024-25 award year. Key changes include:

  • The Student Aid Index will replace the Expected Family Contribution.
  • Parents with multiple children in college will no longer receive a “discount”.
  • Income protection allowances increased.
  • Cash support and other types of income will no longer have to be reported on the FAFSA, including funds from a grandparent-owned 529 plan.
  • Changes to the Federal Pell Grant that would make more students eligible.
  • Rules for divorced parents and child dependency will be based on IRS rules.
  • Changes to financial aid appeals process.
  • Learn more about FAFSA simplification here.

FSA did not provide a timeline for the delayed items. We will continue to provide updates as they become available.

A good place to start:

See the best 529 plans, personalized for you

×