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    The 2024/2025 FAFSA Changes: What You Need to Know

    By Cece Gilmore

    Cece Gilmore is a Content Writer at Scholarships360. Cece earned her undergraduate degree in Journalism and Mass Communications from Arizona State University. While at ASU, she was the education editor as well as a published staff reporter at Downtown Devil. Cece was also the co-host of her own radio show on Blaze Radio ASU.

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    Reviewed by Annie Trout

    Annie has spent the past 18+ years educating students about college admissions opportunities and coaching them through building a financial aid package. She has worked in college access and college admissions for the Tennessee Higher Education Commission/Tennessee Student Assistance Corporation, Middle Tennessee State University, and Austin Peay State University.

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    Edited by Maria Geiger

    Maria Geiger is Director of Content at Scholarships360. She is a former online educational technology instructor and adjunct writing instructor. In addition to education reform, Maria’s interests include viewpoint diversity, blended/flipped learning, digital communication, and integrating media/web tools into the curriculum to better facilitate student engagement. Maria earned both a B.A. and an M.A. in English Literature from Monmouth University, an M. Ed. in Education from Monmouth University, and a Virtual Online Teaching Certificate (VOLT) from the University of Pennsylvania.

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    Updated: April 16th, 2024
    The 2024/2025 FAFSA Changes: What You Need to Know

    The FAFSA, or Free Application for Federal Student Aid, had some major changes for the 2024-2025 school year. Luckily, we broke down all of the new changes affecting the 2024-2025 FAFSA. 

    What is the FAFSA? 

    The FAFSA, or Free Application for Federal Student Aid, is an application that allows students the opportunity to obtain need-based financial aid at colleges and universities in the United States. 

    The FAFSA Simplification Act represents a significant change in the process used to award federal student aid beginning with the 2024-2025 award year. 

    Summary of the 2024/2025 FAFSA changes

    Here are some summary points highlighting the major 2024/2025 FAFSA changes:

    • The FAFSA was available at the end of December of 2023, which is months later than usual
    • The number of questions was reduced from 108 to 36
    • The questions on the FAFSA now align more with federal income tax returns 
    • An increase in aid eligibility for single parents
    • A decrease in aid eligibility for middle and high-income families
    • Reduce the likelihood of verification 
    • New Federal Pell Grant formula
    • Everyone needs an FSA ID to complete the FAFSA application
    • Student can list up to 20 schools on the online FAFSA application 

    Here are some name changes for the 2024/2025 FAFSA: 

    https://www.tiktok.com/@scholarships360/video/7333228808981548330

    A deeper dive into the 2024/2025 FAFSA changes

    Increase in Financial Aid for Single Parents

    There are two types of single parents according to the new FAFSA. This includes dependent students with just one parent or independent students who are single parents. 

    The Income Protection Allowance (IPA) increased: 

    • Parents – Increases by 20% 
    • Most students – Increases by up to $2,400 (35%) 
    • Students who are single parents – Increases by up to $6,500 (60%) 

    There is greater eligibility for the maximum Federal Pell Grant: 

    • Single parent – Adjusted Gross Income (AGI) less than or equal to 225% of the poverty line
    • Not single parent – AGI less than or equal to 175% of the poverty line

    Less Aid for Multiple Children in College

    With the new FAFSA changes, the number of children in college at one time is no longer considered for need-based financial aid. The parent contribution is no longer divided by the number of children in college at the same time. The income protection allowance is no longer reduced based on the number of children in college at the same time. However, families can still appeal for more aid based on having multiple family members in college at the same time. 

    For example, on the 2023/2024 FAFSA, if a family had two members in college and had an expected family contribution of $10,000, then that total was split in half between the two-college attended individuals. However, under the new FAFSA formula, that contribution would be for each family member in college, making the total $20,000 rather than $5,000 per child. This can increase the financial burden for families with more than one member in college. 

    Student Aid Index (SAI)

    The Student Aid Index (formerly known as Expected Family Contribution) is a number that determines each student’s eligibility for certain types of financial aid. A student’s SAI is calculated using modified need analysis formulas. These formulas use information that applicants provide on the FAFSA. 

    The analysis formula has gone through significant changes including: 

    • Removal of the number of family members in college at the same time
    • The possibility for the SAI to be a negative number with a minimum SAI of -1,500 rather than 0 
    • Elimination of alternate EFCs for enrollment for a period other than 9 months
    • Elimination of the Simplified Needs Test (SNT) and Auto-Zero calculations 

    Changes in Reportable Income

    Many types of untaxed income no longer need to be reported on the FAFSA

    • Cash support and other money paid on the student’s behalf
    • Veterans education benefits
    • Workman’s Compensation

    There is an elimination of cash supports yields certain benefits

    • Gifts to the student no longer are reported as untaxed income
    • Qualified distributions from 529 plans that are owned by a grandparent, aunt, uncle do not affect aid eligibility 

    Changes in Reportable Assets

    There are significant changes to the asset contribution components in the SAI formula: 

    • Assets now include the annual amount of child support received 
    • The net worth of a business is no longer limited to those with more than 100 full-time employees. Meaning, applicants must report the net worth of all business, regardless of the size of the business 
    • Farm owners now must include the value of a family farm, including the fair market value of land, buildings, livestock, unharvested crops, and machinery actively used
    • For dependent students, education savings accounts are counted as a parental asset if the account is designed for the student 

    Applicants Exempt from Asset Reporting (previously known as the Simplified Needs Test) 

    • Changes in income thresholds
    • Changes in means-tested federal benefits 

    Auto-Zero 

    Auto-zero is no longer a part of the FAFSA. Therefore, replacement for auto-zero EFC includes: 

    • If a dependent student’s parents or an independent student (and spouse) are not required to file a federal income tax return then the SAI (Student Aid Index) will be negative $1,500
      • Federal financial aid cannot exceed the cost of college, this negative score can be used to distinguish among the neediest students to ensure that states and colleges accurately target students who require the most need-based aid 
    • The SAI (Student Aid Index) set to zero if the student qualifies for maximum Federal Pell Grant

    Asset Reporting Exemption

    Applicants Exempt from Asset Reporting

    • Income threshold for disregarding assets has increased from $50,000 to $60,000
    • If anyone in the applicant’s household received certain means-tested federal benefits in the last 2 years, there will no longer be an income threshold
      • Means-tested federal benefits include: SSI, SNAP, TANF, WIC, Medicaid, and Federal Housing Assistance
      • Free and reduced price school lunch has been dropped from the list of means-tested federal benefits

    Households with one parent 

    When parents are divorced, separated, or never married and do not live together, only one parent must complete the FAFSA. This parent should be the one who provides more financial support to the student not based on where the student lives the most. 

    If this parent has remarried as of the date the FAFSA is filed, the stepparent’s income, assets and dependents must be reported on the FAFSA. 

    Definitions of family size has changed 

    • Family size is the student, parent, dependents from tax return (qualifying child, qualifying relative)
    • Financial aid does not count as student’s self-support

    IRS Definition of Dependent

    Dependents include qualifying children and qualifying relatives. 

    Qualifying children

    • Must live with the parent for more than half of the year
    • Must not provide more than half of their own financial support
    • Financial aid no longer counts as part of the student’s self-support
    • Must be under age 19 (24 if full-time student)
    • If the child is married, they must not file a joint return with their spouse

    Qualifying relative

    • Dependents may include other people if they live with the parent and receive more than half their support from the parent

    Cons to the FAFSA changes

    • The “sibling discount” is ending which makes it more expensive for families with more than one child to send kids to college
    • The FAFSA is opening later this year than it traditionally has in the past. Be sure to check your state and college deadlines which may also be impacted
    • Families earning $60,000 in adjusted gross income who own farms or small businesses employing fewer than 100 workers need to include these assets in their FAFSA, which could reduce their financial aid 

    Pros to the FAFSA changes

    • The application has fewer questions making it clear and more concise to fill out! 
    • Lower-income families are eligible for more aid under the new formulas 
    • Pell Grants are granted automatically based on income and household size
    • Family contribution amounts could be as low as -$1,500 instead of 0 

    How to prepare for the 2024-2025 FAFSA application

    All of the new changes coming to the FAFSA can be extremely overwhelming, therefore it may be a good idea to take the steps below to help students and parents prepare before the FAFSA opens. 

    Obtain an FSA ID

    Student and parent, or for students who are married, student and spouse, can obtain FSA IDs before the FAFSA opens, so that can be one less thing to worry about! 

    Determine your dependency status 

    Knowing if you are an independent or dependent student prior to completing the FAFSA can help save you time because you  know which sections of the form to fill out. Additionally, it allows you time to tell your parents or guardians that they need to fill out the form as well. 

    Be aware of the December launch date! 

    Now that you are well prepared to answer the FAFSA questions, make sure you do not miss the first day that the FAFSA is open! Remember, completing the FAFSA early allows you to obtain financial aid first and ensure your chances are the best for receiving generous financial aid!

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    Frequently asked questions about the 2024/2025 FAFSA changes

    What is an FSA ID

    The FSA ID is a Federal Student Aid username and password used to access Federal Student Aid websites. To create an FSA ID, go to StudentAid.gov and click on Create Account.

    Can I save what I have and come back later when filling out the 2024-2025 FAFSA?

    Yes! You can save what you have and log back into the FAFSA to make changes any time before your FAFSA Is submitted.

    What year of income information is required on the 2024-2025 FAFSA

    The 2024-2025 FAFSA requires income information from the 2022 tax year.

    What are considered assets and what are not?

    Assets that must be reported include your current total balance of cash, savings, and checking accounts; college investing accounts; net worth of investments; a family farm or family business; real estate such as rental property, land and summer homes.  Assets that are not reported include the value of your retirement accounts, the home you live in, personal possessions, pensions and whole life insurance.

    When will I receive my financial aid offer?

    Typically, you won’t receive a financial aid offer until you have completed the financial aid application process and have been admitted to the schools. Schools have different schedules for when they send financial aid offers.

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