The Free Application for Federal Student Aid, more commonly called FAFSA, for the 2024-25 school year is now launched.* FAFSA is the application that families fill out to apply for federal financial aid to attend accredited four-year colleges and universities, two-year community colleges, vocational schools, U.S. Labor Department approved apprenticeships, and graduate schools.
FAFSA is used not only by the federal government to determine a financial aid offer. Other organizations—like states in which the applicant lives, the universities and colleges to which the student has applied, and other private organizations—also use the information found on FAFSA to determine institutional grants or loans to offer students.
For the past few years, the start date has been Oct. 1. However, the FAFSA Simplification Act is bringing sweeping changes to the U.S. Department of Education form. The rollout of all these changes has delayed the start of the financial aid process for the 2024-25 school year.
FAFSA changes
One of the largest changes to the FAFSA includes the reduction of questions from over 100 to around 50. This decrease is due to IRS financial information being added directly to the FAFSA, which should reduce the amount of wrong data being added to the form. However, this means that all parties who work on the application must consent for IRS tax data to be transferred to the FAFSA form. There will be notification when this consent is required. You can decline your consent to have the IRS tax information transferred; however, if you do so, you will most likely not be considered eligible for the free financial aid.
The Student Aid Index (SAI) will replace the Expected Family Contribution (EFC). Like the EFC, the new SAI will estimate what families can pay for their children’s higher education as determined by the family’s assets as well as other financial assistance the student would receive. The new need-based financial aid will be determined by this formula: Cost of Attendance (COA) – Student Aid Index (SAI) – Other Financial Assistance (OFA) = Financial need.
And good news for grandparents. Previously, any withdrawals from a grandparent-owned 529 plan to cover their grandchildren’s college costs was considered an asset for the student. The student would then have to include the grandparent 529 withdrawal on their asset portion of the FAFSA where it was counted to 50% of the withdrawal value. Starting with the 2024-25 FAFSA, grandparents 529 withdrawal will no longer be considered a student asset and is not figured into the financial aid equation.
The form will also now be available in the 11 most common languages spoken in the United States.
To read more about the upcoming FAFSA changes, Federal Student Aid, the federal agency which administers the FAFSA and its processes, has a wealth of information to share.
Prepare now by setting up FSA IDs
Even though the FAFSA start date is delayed, it is important to prepare now so you can immediately start work on FAFSA once it is available.
The first step is setting up a FSA ID for your child, yourself and anyone who will work on this form. As the applications are not yet ready, take the time now make sure you have already created all the needed FSA IDs and passwords before FAFSA start date. It may take several days to verify your IDs so it is best to get this needed item so you can immediately work on the form once it is available.
Additional schools
Previously, your student could only list ten schools on their FAFSA application. With these new changes to the online FAFSA form, your child can now send out the information to 20 schools. Make sure your student takes the time to decide which institutions of higher education they would like to include in their applications.
What types of financial aid are available?
Federal student aid is available in different forms. Need-based federal financial aid typically is offered in as grants, scholarships, subsidized loans, or work-study. Before you accept any aid, make sure you understand the financial commitments that come with each of them. A Pell Grant does not have to be repaid but federally subsidized student and parental loans must be repaid with interest.
When the FAFSA application period for the 2024-25 school year comes available, it is best to complete your FAFSA form as soon as possible, as the financial aid is offered on first-come, first-served basis. The earlier the submission, the better the chances are that your child will receive federal monetary assistance. If the FAFSA application is submitted later, the available pool of financial aid may be smaller, which can affect how much funding your child could receive.
You can use your Ohio 529 Plan at any higher education institution that accepts federal financial aid. The quickest way to confirm that the school to which your child may want attend in the USA does accept this government aid is to see if it has a Federal School Code on FAFSA. If it does, you can use your 529 plan there.
Visit Ohio’s 529 Plan, CollegeAdvantage, online to start saving today for your child’s future education with as little as $25. A 529 account are for whatever education comes after high school—including four-year colleges and universities, community colleges, tech, trade or vocational schools, apprenticeships, and certificate programs. Learn, plan, and start with Ohio’s 529 Plan today at CollegeAdvantage.
*As stated in the U.S. Department's revised press release of Jan. 4, 2024: https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2023-12-15/2024-25-fafsa-soft-launch-details-and-timelines-updated-jan-4-2024
