The FAFSA Simplification Act of 2021 brings a slew of changes to the FAFSA that will begin with the 2022-23 application cycle (when current sophomores are seniors). These changes won’t take effect for over a year, but families should be familiar with these changes while considering the four-year cost of college.
Currently, a family’s expected contribution is divided by the number of children in college. As of 2022, this benefit goes away. This loss will reduce the amount of need-based aid that middle and high-income families with multiple family members enrolled in college can expect.
Currently, students whose parents live separately submit information for the parent with whom they live a majority of their time.
Demonstrated need is currently calculated by the total cost of attendance minus the expected family contribution (EFC). .Because most colleges do not meet 100% of demonstrated need, the EFC misled families into thinking that this number was what they would actually pay for a year at college, but most families paid more than the EFC and were expected to provide more funds from assets or through student/parent loans. The name Student Aid Index better reflects what the number represents.
Also, the new legislation shortens the number of questions from about 100-plus questions to 35, which will hopefully encourage more families to complete the FAFSA. Pell Grant-eligible students will see another change—lower-income students may find it easier to determine how much Pell money they can expect earlier in the process with the new FAFSA.