Students Are Applying for Aid with New FAFSA

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FAFSA

By Jeremy Hus

Submission of the Free Application for Federal Student Aid (FAFSA) is the first step for all students seeking Federal, state, college, and private financial aid. To improve the financial aid process, the FAFSA Simplification Act (the Act) was enacted by Congress on December 27, 2020 to make it easier for students and families to complete the FAFSA and to make the allocation of student aid more equitable.

The 2024-25 rollout of the revised FAFSA by the U.S. Education Department (ED), as mandated by the Act, was beset by delays and complications. It was several months late and ridden with bugs and omissions. As a result, its ability to help students trying to afford college was significantly reduced. Although intended to streamline the application process and make financial aid more accessible, the new FAFSA produced the opposite outcome.

Changes in the 2024-25 FAFSA

The 2024-25 FAFSA incorporated key changes from the previous FAFSA, including: 

  1. Fewer questions: The 2024-25 FAFSA had fewer questions, with most students only needing to answer 18. The 2023-24 FAFSA had 103 questions. 
  2. New terminology: The Expected Family Contribution (EFC) was replaced by the Student Aid Index (SAI).
  3. New methodology: The methodology for determining aid changed, and the number of family members in college was no longer part of in the calculation. 
  4. More students eligible for Pell Grants: The Federal Pell Grant was made available to about 610,000 additional students. 
  5. New contributor term: The term contributor was introduced to refer to anyone providing information on a FAFSA, e.g., a parent, stepparent, or spouse. 
  6. New FSA ID process: A new process was put in place to provide an FSA ID for parents and spouses even if they had no Social Security number.
  7. New Direct Data Exchange: The IRS Direct Data Exchange replaced the IRS Data Retrieval Tool for the transfer of Federal Tax Information to the FAFSA.
  8. New consent section: On the new form, contributors must consent to providing their Federal Tax Information to FAFSA. 
  9. Asset reporting: Family farms and small businesses are reportable as assets,
  10. Removal of two requirements: Drug-related convictions no longer disqualify applicants and they no longer need to register for the Selective Service.

Changes in the 2025-26 FAFSA

There was plenty of room for improvement in the 2024-25 FAFSA, especially with regards to the timing of its release. Last year’s form was not fully available to applicants until March 1, five months past the traditional start date of October 1. This caused millions of applicants to miss important deadlines in the financial aid timeline. This year, although still late seven weeks late, the FAFSA was released on November 21. Since then, students have been able to submit the FAFSA for financial aid at a college or career school for the school year of July 1, 2025 to June 30, 2026. The deadline for submission is June 30, 2026. 

The 2025-26 FAFSA forms that are submitted online are now processed in only three days. Once the form is processed, students are able to review a FAFSA Submission Summary and the FAFSA information is provided to the student’s selected schools.

A new feature on the 2025-26 FAFSA is a Parent Wizard tool that helps students identify the correct parent information to use on their application. It also features less ambiguous wording of questions, a more user-friendly interface, and a streamlined application process, all intended to make the FAFSA easier to navigate and complete.

Key points about the 2025-26 FAFSA changes are summarized below:

  1. Parent identification tool: A Parent Wizard app is available to guide students in determining which parent’s information is needed on the form. 
  2. Clearer instructions: Improved wording of questions for clarity. 
  3. Contact center: The ED has increased staffing at the Federal Student Aid Information Center to improve the contact center experience. 
  4. Improved interface: The design of the application is more user-friendly. 
  5. Tax year used: The 2025-26 FAFSA requires 2023 tax return information. 

The National College Attainment Network (NCAN) has resources and tools to help with the 2025–26 FAFSA, including a training deck, parent/student guides, and infographics.

Performance of the 2025-26 FAFSA Since Release

This year, the new FAFSA went through extensive testing with a large number of test subjects. The ED processed applications from over 14,000 applicants during the test period, resulting in a smooth rollout with few technical issues. 

The FAFSA is available online at fafsa.gov and studentaid.gov. It’s also available as a downloadable PDF form . The ED began processing paper forms in early December. 

Key points about the 2025-26 FAFSA launch include the following:

  1. Extensive Testing: For the first time, the ED planned and conducted a comprehensive testing phase with a range of diverse student groups and colleges to identify and resolve potential issues before the official launch. 
  2. Positive Feedback: Test subjects reported a positive experience with the new FAFSA process, which indicates that the system performs as intended. 
  3. No Major Glitches: The ED stated that they have successfully processed a significant number of test FAFSA’s without major technical issues. 

Status Quo in December 2024

For several months during last year’s FAFSA cycle, many students were frozen in place, unable to determine whether they qualified for the grants and loans that could make college affordable for them. These tended to be those with the greatest financial need; students with an undocumented parent or a parent without a Social Security number; and students whose parents didn’t speak English. All applicants were burdened by the inability to fix erroneous data after submission. These problems led some students to decide not to attend college in 2024-25.

In summarizing the current FAFSA cycle, Ron Lieber of the New York Times wrote, “As for the people who really are doing the work (to submit the FAFSA), it’s hard to erase fresh memories of disappointed teenagers last year coming back to them multiple times for help filling out the deadbolted form that could unlock their futures. Students remember it, too. The ones who have finished their FAFSAs this year can’t quite believe that it actually worked.”

To learn more, contact your Barnum representative today. Don’t have one? Click to get a complimentary financial assessment.
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