2023-24 FAFSA: Changes to expected family income, Pell grants and subsidized loan affordability
In 2021, Congress passed several changes to the FAFSA form, streamlining some parts of the monster application and changing some terms and grant levels.
Some of those changes are now taking effect for this year’s FAFSA, which opened Oct. 1, and which students will want to fill out by June 30, 2023 (or earlier — check your school’s dates!) for the 2023-24 school year.
Pell grant recipients are likely to see the biggest differences in aid amounts. And, soon, Pell recipients will be able to see if they’re eligible for the biggest aid to low-income students before they fill out the form, hopefully encouraging more students to apply for aid and enroll in school.
Some questions are pretty different.
- No more Selective Service requirement. Until recently, the FAFSA asked if applicants had registered for the draft as part of its financial aid screening.
- Students with a record of drug convictions will no longer be ineligible for financial aid.
- The FAFSA no longer asks, “Are you male or female?”
- Incarcerated students can now qualify for the federal Pell Grant. This reverses a 1994 rule.
Other changes, approved in 2021, might not be seen until 2024-25.
- The bill replaces the current Expected Family Contribution (EFC) with a Student Aid Index (SAI). The name change is meant to reflect the calculation as a determination of aid eligibility rather than an expectation of what a family can afford to pay for college. An applicant’s SAI can be as low as -$1,500 (compared to the lowest EFC, which is $0).
- Students will be able to look up whether they’ll be eligible for a Pell Grant based on their income and family size information even before they apply. This will be super cool! (Learn more about the Pell Grant here.)
- The bill makes changes to the “income protection allowance” for both students and parents and protects a greater percentage of earned income. Ideally, working students and families will now receive more aid.
- The bill restores lifetime Pell Grant eligibility for many students who were unable to complete their program of study after being victims of a fraudulent college or seeing a for-profit college unexpectedly close.
- The bill eases the financial aid application process for students formerly in foster care and students experiencing homelessness.
- The bill repeals the limitation on lifetime subsidized loan eligibility, known as the Subsidized Usage Limit Applies (SULA) requirement, which currently bars students from receiving subsidized Direct Loans for more than 150% of the published length of their program. The bill requires the Education Department to implement the repeal by July 1, 2023, but allows for early implementation.
What is the IRS Data Retrieval Tool?
People filling out this year’s new FAFSA form will need their 2021 income tax information. The easiest way to pull up that information is to use the IRS’ online tool, which scans past tax filings and automatically imports information into the FAFSA. Some people, though — students who are married but filing separately, people with no income tax filing history, or people who need to edit their information — might have trouble using the tool effectively.
How do I get help with the FAFSA in Alabama?
Many high schools, community colleges, universities and community organizations are hosting workshops and offer help to students and families.
One statewide organization with great resources is Alabama Possible. You can find some of their resources here.