Understand the Latest FAFSA Changes for 2024-2025

FAFSA Changes for 2024-2025 Kenneth T. Cole

Welcome to the new FAFSA 20XX PRESENTATION TITLE 2

20XX We re Going through Changes The new FAFSA is designed to quickly bring in Federal IRS tax information and to rework the application to make greater use of that information. This means new information can be used but some old information is being removed. To tie the FAFSA closer to tax rules, the parent used on the FAFSA is also changing. PRESENTATION TITLE 3

20XX FAFSA Filing Date Don t file the FAFSA YET! The FAFSA for 2024-2025 will be available in December! If students try now, they will submit the Wrong FAFSA. FSA IDs Can be created now Requires a unique Email for each person Must keep up with them! If locked out, 30 minutes to 24 hours to reset PRESENTATION TITLE 4

20XX Recent Changes Removed drug conviction questions (no longer a law) Selective Service registration (no longer required) Homeless Unaccompanied Youth Extensions Can indicate they did not get it confirmed Homeless Liaison s at schools are still important PRESENTATION TITLE Professional Judgement expansion FA Offices have more flexibility on these decisions 5

The BIG Changes And what this means for your students

More students will be Pell Grant Eligible Some students may lose some Pell grant eligibility 20XX PRESENTATION TITLE 7

20XX Eligibility Changes The EFC is now the SAI Estimated Family Contribution was 0+ Student Aid Index can be as low as -1500 Maximum Pell Incomes under $60,000 could have Maximum Pell If they have means tested programs (SNAP, Free/Reduced Lunches, etc ) Other factors could affect this Some Pell More students will be Pell Eligible Incomes under $90,000 could have some Pell PRESENTATION TITLE Lost Pell Some families who previously had Pell, might lose some or all Small business and family farms Students with more than 1 student in college They would have had an income of $70,000 or less in most cases. 8

20XX CONTRIBUTORS Those whose income is used to determine aid eligibility. Students will need to know their Contributor s Full Name, Date of Birth, Social Security Number AND Email Address Parent 2 OR Step-Parent Spouse Parent(s) If parents are married or live together, must include the other parent (or step-parent s) tax and asset information. If single, just that parent If student is married If married or living together, both parents. If Divorced/Separated.. Not if Separated, Widowed or Divorced If parents are married but file taxes separately, the other parent becomes a second contributor. Their income and asset information must be added to the FAFSA. PRESENTATION TITLE The parent who supported the student for the past 12 months. Their Tax and asset information. It no longer matters where the student lives or who claims them on their taxes. Just who supported the student. This could be a Step-Parent, if the parent providing more support is Remarried. 9

Who IS the Parent? The parent(s) are the Legal, Biological or Adopted parent(s) 20XX If parent was never married, their tax and asset information is required If parents ARE married, both parents tax and asset information is required If parents were divorced or separated, the tax and asset information is required for the Parent who provided the greater proportion of the student s financial support over the 12 months immediately prior to filing the FAFSA. This means the past 12 months prior to filing the FAFSA Even if the student does not live with that parent Even if the student lives with the other parent If the parent remarried, the Step-Parent s tax and asset info is required PRESENTATION TITLE We don t verify which parent provides the greater portion of support, unless there is conflicting information There is a Parent Wizard 10

students financial support? 20XX What does greater proportion of the student s financial support mean? Parental income and assets for a student whose parents are divorced or separated, but not remarried, is determined by including only the income and assets of the parent who provides the greater portion of the student's financial support. IF the parents are divorced or separated (no longer living together). The student and parents would make the determination Each parent determines how much financial support they provide that student They would then determine who provides the greater portion Child support paid remains income of the parent who pays it (not the parent who receives it). Don t count it twice. PRESENTATION TITLE A lot of questions remain unanswered. If one parent is remarried, does the step-parent s income get added when calculating who provides the greater portion of the student s financial support? If the parents filed jointly in 2022, but now are separated, how will the FAFSA separate the incomes if it pulls the FTI in automatically and gives no option to enter it manually? 11

Federal Tax Information (FTI) from the IRS is required. All contributors must give consent. If no taxes filed, IRS will confirm. 20XX PRESENTATION TITLE 12

Federal Tax Information Tax information is automatically pulled onto the FAFSA from the IRS 20XX The FSA ID used to sign in is giving consent to access the IRS By filing the FAFSA consent is being given (it is required) Even if they don t file Federal IRS Taxes, they must give consent If they do not file taxes, they will be asked about other income PRESENTATION TITLE It is more important than to make sure the contributors are the ones signing! Don t help students sign for parents or parents sign for students. 13

20XX Family Size Based on what is reported on the Taxes So, based on the Supporting Parent who is reported on the FAFSA (even if the student isn t claimed by that parent) Students can request changes through their college financial aid office. PRESENTATION TITLE An Unborn Child is no longer in Family Size 14

20XX Number in College (is gone) Number in College is no longer asked and no longer counts Will reduce the eligibility for some families Colleges will have some discretion to the need calculation (adjusting Cost of Attendance) Other Educational Expenses This may increase need, but not Pell eligibility! PRESENTATION TITLE 15

ASSETS 20XX Students are assessed at 20% Parents are assessed at 12% and have an asset protection CURRENT CURRENT CURRENT Net Worth of Investments, Including Real Estate Net Worth of Business and Investment Farms Enter the net worth of the business or for-profit agricultural operations. Total Cash, Savings and Checking Don t Include Financial Aid, even if you have it in Savings. Don t include the home you live in. PRESENTATION TITLE Net worth is the value of the businesses or farms minus any debts owed against them. Net worth is the value of the investments minus any debts owed against them. Size of business NO LONGER matters! 16

20XX Other Asset Questions Child Support is now included as an asset (no longer part of income) Report amount received in prior calendar year (IE 2023) Business Net Worth is now being pulled from Taxes The number of employees is no longer considered There may be questions related to this Farms More questions will be asked to calculate the Net Worth For a Family Farm you can subtract the value of the primary residence Net Worth otherwise is: The fair market value of land, buildings, livestock, unharvested crops, and machinery actively used in investment farms or agricultural or commercial activities, minus any debts held against those assets. PRESENTATION TITLE Education Savings Only report the educational savings for THIS Student in parent assets. No longer required to report education savings for other children. The account must be an educational savings account (not just any savings) AND It MUST designate the child by name (not be a general account). Some applicants will still be exempt from reporting assets, if their income is low 17 Only one parent is asked to report Assets, which is the supporting parent.

Dependency Status Provisionally Independent Students The student can say they are Independent for unusual circumstances The FAFSA can still be completed The college may have to get confirmation to award financial aid. 20XX Independent students will not be asked for parent info Homeless or at risk of homeless is now expanded. We still need Homeless Liaisons at the High Schools. FA Administrators can now confirm this if other evidence is missing. PRESENTATION TITLE Students who are Separated are now Unmarried if under 24 may be DEPENDENT again. 18

Other Changes 20XX Demographic Questions: There is a survey asking gender, transgender, race, and ethnicity. these questions may appear in the middle of the FAFSA they are NOT required. They do NOT affect eligibility. There is some discussion about moving them to the end Parents Education Level question now asks Did either of the students parents attend college? This may not match definitions of First Generation College Student . Could be harder for first-generation programs to identify candidates. TRiO programs usually identify first-generation as neither parent Graduated with a college degree. PRESENTATION TITLE Colleges Can now list 20 colleges Housing Status is no longer asked. Students should contact college. 19

SUMMARY 20XX The FAFSA comes out in December this year The FAFSA is still easy The FAFSA has fewer required questions Initial Income is based on the Parent who supports the student Each contributor now has a login to complete their part Each contributor is consenting to have IRS information accessed PRESENTATION TITLE More students will be Pell grant eligible A few families may lose some Pell grant eligibility High School Seniors probably won t even notice the changes! 20

20XX THANK YOU Kenneth T. Cole PRESENTATION TITLE colekt@email.sc.edu http://usclancaster.sc.edu/ 21