FAFSA SIMPLIFICATION ACT AND CHANGES TO THE
2024-25 FAFSANEW 2024-25

Dear Campus Colleagues,

Significant changes are coming to the federal financial aid process in the 2024-25 academic year as part of the Consolidated Appropriations Act 2021 and 2022. The Department of Education has described these changes as the most ambitious and significant redesign of the Free Application for Federal Student Aid (FAFSA), the application process and the formulas used to determine aid eligibility, since the Reagan era. As colleagues who work closely with the financial aid team in the awarding of more than $500 million in financial aid annually, we are alerting you to these changes in preparation for the 2024-25 academic year.

FAFSA Simplification
The FAFSA Simplification Act will streamline the application process for federal aid applicants by reducing the number of questions on the FAFSA form and providing a direct data exchange with the IRS. The Act will also expand eligibility for Federal Pell Grants and reduce barriers for some populations of students.

State and institutional aid programs are also dependent on the federal aid process, including the California Dream Act Application (CADAA), Cal Grant, Middle Class Scholarship and university grant awarding. We are working closely with our colleagues at the California Student Aid Commission and UC Office of the President to understand and prepare for downstream changes at the state and campus levels for 2024-25.

Important FAFSA Changes
Many of the processes, terminology and eligibility requirements we are all familiar with will be changing, including:

• The FAFSA and CADAA are expected to open December 31, 2023, instead of the traditional October 1st date.
• New terminology will be used throughout the federal aid process.
• The Expected Family Contribution (EFC) will be replaced by the Student Aid Index (SAI).
• A new federal need-analysis formula will be used to measure a family’s ability to pay for college that allows for a minimum SAI of -$1,500.
• A separate eligibility determination criteria links family size and the federal poverty level to Federal Pell Grant eligibility.
• All FAFSA contributors (students, parent(s), and/or spouse) will be required to have an FSA ID and consent to sharing information with the IRS to submit the FAFSA.

Considerations for Campus Partners
We anticipate many campus partners who have a connection with financial aid could be impacted by these changes. This includes departments and programs providing need-based funding and/or services to financial aid recipients, as well as partners utilizing financial aid data for reporting. More than 23,000 undergraduate students receive some form of financial aid and nearly 11,000, or 32% of the undergraduate population are Federal Pell Grant recipients. We encourage our campus partners to begin considering how changes in the student population, including a possible increase in Federal Pell Grant recipients, may impact the services and resources your department provides.

Key Takeaways
A change of this magnitude will require professional and student staff to support financial aid applicants navigating these changes. The Financial Aid and Scholarships team is preparing resources to help you serve students and families.

As a starting point, Enrollment Management Creative Services created a document that highlights many of the changes, including important dates and planning considerations for 2024-25. Our office will soon begin engaging campus stakeholders to present the changes as well as our initial analysis of how our financial aid population may change. If you represent a department, college, school or division and are interested in a Better FAFSA Better Future presentation for your area, please contact us. We will do our best to accommodate requests and appreciate your scheduling flexibility.

What can you do now?
The Department of Education is sharing information, updates and changes related to Better FAFSA Better Future regularly. We encourage you to familiarize yourself with the resources readily available, including:

• FAFSA Changes Overview
• Better FAFSA Better Future Overview Video
• Federal Student Aid Estimator
• New: Update from ED on 24-25 FAFSA Release - 11/15/23

More information is available on our FAFSA Simplification webpage. We will continue to provide updates, resources and support to the UC San Diego community as we navigate these changes together.

We hope this early notification of changes will help you plan and reduce impacts to the services and resources you provide to students. We appreciate your patience and support.

Silvia Marquez (she/her/ella)
Executive Director, Financial Aid and Scholarships Office

Jim Rawlins
Associate Vice Chancellor, Enrollment Management

2024-25 FAFSA Issues Reported and Updates

The UC San Diego Financial Aid and Scholarships Office is committed to supporting all students and their families. We recognize the multiple challenges faced by students and families trying to access and submit the 2024-25 FAFSA, especially those trying to apply for an FSA ID through the new federal process. We are acutely aware that our students from mixed-status families, i.e., eligible students whose parent contributor(s) do not have a Social Security Number, are currently unable to submit the 2024-25 FAFSA.

We understand the application barriers faced by our mixed-status families are beyond the student’s control. Our goal is to ensure students facing these barriers receive the maximum amount of federal, state and institutional financial aid they are eligible for in the 2024-25 academic year once the FAFSA is processed.

We encourage all other eligible students and contributors to create the FSA ID and start their FAFSA as soon as possible and no later than April 2, if they have not already done so. For families unable to submit the application due to the system barriers, rest assured we are here for you and will continue to work with you.

We are committed to:

• advocating at the federal, state and local levels to resolve these issues as quickly as possible;
• communicating information to you as it becomes available and;
• generating 2024-25 financial aid offers as soon as possible for newly admitted and continuing students

Top 10 Things to Know So You Can Prepare

Mixed Student Family Info Session Q&A

NEW: Update on two SSN Technical Glitches

Subscribe to the FAFSA Contributor Update Listserv

How to Submit the 2024-25 FAFSA Form if Your Contributor has no SSN

Como enviar el formulario FAFSA 2024-25 si su contribuyente to tiene SSN

The FAFSA Simplification Act passed on Dec. 27, 2020 as part of the Consolidated Appropriations Act, 2021 and represents a significant overhaul of federal student aid, including the FAFSA form, need analysis, and many policies and procedures for schools that participate in the Title IV programs.

Federal Student Aid will be implementing the FAFSA Simplification Act alongside the FAFSA portion of the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act which authorizes a direct data exchange with the Internal Revenue Service (IRS) to make it easier to complete the FAFSA form.

While financial aid applications will overall become easier for students, a new need-analysis formula will influence student aid. Many programs and partners across campus who have any connection to financial aid, including awards, scholarships, and grants, may be affected. Additionally, existing information systems will need to be updated and modified to handle new data fields and new types of data.

The FAFSA for the 2024-2025 school year is projected to be available for students and parents on Dec. 31, 2023.

The California Student Aid Commission is making changes to the California Dream Act Application (CADAA) to include some of the terminology updates in the FAFSA Simplification Act, including Student Aid Index (SAI). Similar to the FAFSA, the CADAA will become available on December 31, 2023. All students must complete either the FAFSA or CADAA to be considered for government student aid.

Estimated Family Contribution (EFC) Is Now The Student Aid Index (SAI)

The EFC and SAI work similarly as each number represents an amount that estimates what families can pay for a student’s education costs, and it considers factors like household income and assets. Additionally, SAI may be a negative number down to -1500.

The number of children in college will no longer be included in the SAI calculation. Questions will still appear for institutional purposes only.

Pell grants eligibility is tied to how household income and family size compares to poverty guidelines. Families making less than 175% and single parents making less than 225% of the federal poverty guidelines may be eligible for the maximum Pell. Minimum Pell will be guaranteed to students from households below 275%, 325%, 350%, or 400% of the federal poverty guidelines, depending on household structure. All aid is determined by SAI.

What Is A Contributor?

A contributor is considered any individual required to provide a signature and consent on the FAFSA form, including the student, student’s spouse, a biological or adoptive parent, and/or the parent’s spouse (step-parent).

Each contributor will now need to provide their consent to their federal tax information (FTI) being included in the FAFSA.

Who Is A Contributing Parent?

The contributing parent is no longer the custodial parent, but the parent with the greater income and/or assets. The new 2024-25 FAFSA will have a Parent wizard to help students identify who should be added as a contributing parent. Parent is defined as your biological or adoptive parent and/or the parent’s spouse (step-parent).

Consent Is Required For Every Contributor

Consent is required to retrieve and disclose Federal Tax Information (FTI). Every contributor is required to consent. If consent is declined, the student’s FAFSA will not be considered for federal student aid, including grants and loans. A consent is still required even if the student and/or parent didn’t file a U.S. federal tax return or any return at all.

The FAFSA will no longer ask for a Save key. However, all contributors must have a FSA ID to complete the FAFSA application. The FSA ID serves as a digital signature on the FAFSA. Parents who do not have a social security number are also required to create an FSA ID. Details on this process are coming and will be updated on the Federal Student Aid site.

The IRS Data Retrieval Tool (DRT) is being replaced with Direct Data Exchange (DDX) as the process for transferring federal tax information (FTI) from the IRS to the FAFSA. This will reduce the number of financial questions that most families are usually asked on the FAFSA. In order to use the DDX, all contributors must consent to having their tax information transferred.

This is an increase by 10 schools from the 2023-2024 FAFSA. If there are specific state guidelines when you select a school, the online FAFSA will list them for review in that section.

A contributor is any individual required to provide a signature and consent on the FAFSA form, including the student, student’s spouse, biological or adoptive parent, and/or the parent’s spouse (step-parent).

The IRS will develop the FUTURE Act–Direct Data Exchange (FA-DDX) technology solution, which will establish a secure connection between the IRS and FSA agencies to process requests in near-real time.

Review the What is Direct Data Exchange video on Financial Aid TV.

The IRS Data Retrieval Tool (DRT) electronically transfers Federal Tax Return Information (for students and parents) into your FAFSA form.

Your Expected Family Contribution (EFC) is an index number used to determine your eligibility for federal student financial aid and is based on the information you provide in your FAFSA form.

The EFC index will no longer be used to determine eligibility beginning with the 2024-205 academic year. It is being replaced with the Student Aid Index (SAI).

Federal Student Aid (FSA) is an office of the U.S. Department of Education.

Federal tax information (FTI) consists of federal tax returns and return information (and information obtained from it).

The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory tax law.

The meaning of parent for FAFSA application purposes is defined as your biological or adoptive parent and/or the parent’s spouse (step-parent).

The Student Aid Index (SAI) is a number that determines each student's eligibility for certain types of federal student aid. This number is calculated with formulas that use information that you provide on your FAFSA form.

SAI is replacing the Expected Family Contribution (EFC) beginning in the 2024-25 academic year.

Review the Understanding the Student Aid Index video on Financial Aid TV.