FAFSA Simplification and Financial Aid Eligibility

The Consolidated Appropriations Act of 2021 authorized changes in the Free Application for Federal Student Aid (FAFSA) to simplify the form. In addition to eliminating two-thirds of the questions, it will also affect the determination of financial need for low-, middle- and high-income students.

FAFSA simplification begins in the 2021-22 award year and will continue in phases through 2024-25. While most changes will be delayed, some updates are happening ahead of schedule. According to Federal Student Aid (FSA), a phased approach and longer timeline were necessary to complete the FAFSA simplification because of the extensive changes.

FAFSA Simplification Changes Happening Now

Students completing the FAFSA for the 2021-22 school year are affected by a few initial changes. These include:

  • Subsidized Usage Limit Applies (SULA) rules are no longer in effect.
  • Male students no longer have to register for Selective Service to qualify for federal financial aid.
  • The FAFSA will not ask students about prior drug convictions.

However, the questions have not yet been removed from the FAFSA, so Federal Student Aid is proactively sending emails to students who are associated with 2021-2022 ISIRs received prior to the implementation date and who were determined to be ineligible based on their answers to Selective Service and drug conviction questions informing them about the change in the law and their potential eligibility for Title IV aid. Emails will direct students to contact their institution’s financial aid office. Click here for more information about this.

FAFSA Simplification – Delayed Items

The Department of Ed expects to complete FAFSA simplification in time for the 2024-25 award year. Key changes include:

  • The Student Aid Index will replace the Expected Family Contribution.
  • Parents with multiple children in college will no longer receive a “discount”.
  • Income protection allowances increased.
  • Cash support and other types of income will no longer have to be reported on the FAFSA, including funds from a grandparent-owned 529 plan.
  • Changes to the Federal Pell Grant that would make more students eligible.
  • Rules for divorced parents and child dependency will be based on IRS rules.
  • Changes to financial aid appeals process.

To learn more details about FAFSA simplification and how it affects financial aid eligibility click here.

See Also: College Savings Planning Tips


Savingforcollege.com, FAFSA Simplification Pushed Back 1 Year by Kathryn Flynn, 6/14/2021.

This material has been authored by Savingforcollege.com and CLF makes no representation and takes no responsibility for the accuracy of the information presented.