The FAFSA^® Simplification Act, enacted by Congress in 2020, marks a substantial overhaul of federal student aid. This transformation encompasses alterations to the Free Application for Federal Student Aid and the need analysis that determines eligibility for federal aid, as well as adjustments in terminology.

The effort, which took effect with the 2024-25 aid year, is designed to streamline the application process, reduce questions and barriers and expand eligibility.

• The Estimated Family Contribution (EFC) has been replaced by the Student Aid Index (SAI) to determine eligibility. The SAI is an evaluation of the financial resources that may be available to contribute toward a student's education expenses. It implements separate eligibility determination criteria for Pell Grants.
• SAI will no longer consider the number of students in college within the family.
• IRS tax information will be directly imported into the FAFSA^®.
• Students will be able to list up to 20 colleges and universities on the FAFSA^®.
• Each Contributor – student, spouse, parent(s) and/or stepparent(s) – will have to provide consent to complete the FAFSA^®. If any contributor does not consent, the SAI will not be calculated, and eligibility for financial aid cannot be determined. Individuals who are Contributors to your FAFSA^® are not agreeing to accept financial responsibility for your education.
• Parents without a Social Security number will be able to apply for an FSA ID. This will speed up the FAFSA^® processing time, as they will be able to submit the form online rather than having to print, sign and mail it.
• For students whose parents are separated or divorced, the guidance on which parent income to report has changed to the parent who provides the most financial support for the student rather than the parent the student lived with the most.
• Students who are considered independent due to homelessness or qualifying dependency override no longer need to recertify their dependency status each year unless their situation changes.
• The definition of family size now aligns with the number of individuals reported as dependents on the applicant's (if independent) or applicant's parents' (if dependent) federal tax return. Applicants may also update their family size if it changes after filing their tax return.
• When required, families must now report the value of their small business or family farm.

Updated terminology

Contributor – Contributor refers to anyone asked to provide information on a student's FAFSA^®, including the student, the student's spouse, a biological or adopted parent and the parent's spouse. Individuals who are Contributors to your FAFSA^® are not agreeing to accept financial responsibility for your education.

FAFSA^® Privacy Act consent – Formal consent provided by an applicant and any applicable contributor(s) for a given FAFSA^® cycle (e.g., December 2023 to September 2025 for the 2024–25 FAFSA^® form) that meets the statutory requirements of collecting and using an individual's personally identifiable information.

FAFSA^® Submission Summary – Replaces the Student Aid Report as the student's output document providing a summary of data input on the FAFSA^®.

Family size – Replaces the term "household size" on the FAFSA^®.

Federal tax information – The data and information related to paying federal taxes. It includes a return or return information received directly from the IRS or obtained through an authorized secondary source, such as the U.S. Department of Education.

Student Aid Index (SAI) – Replaces the Expected Family Contribution (EFC) as a formal evaluation of a student's approximate financial resources to contribute toward their post-secondary education for a specific award year.

Pell Grant impact

Federal Pell Grant eligibility will be determined in three steps:

1. Maximum Pell Grant – Applicants may qualify for a maximum Pell Grant award based on family size, household income and poverty guidelines. Students qualifying for a maximum Pell Grant will have an SAI between -1500 and 0.
2. SAI – Applicants who do not qualify for a maximum award may still qualify for a Pell Grant if their calculated SAI is less than the maximum award for the award year. The applicant's Pell Grant award for full-time enrollment will be equal to the maximum for the award year minus the SAI. The grant will be adjusted if the applicant enrolls less than full time or if the applicant's cost of attendance is less than the calculated Pell Grant award.
3. Minimum Pell Grant – Applicants whose SAI is greater than the maximum award for the award year may still qualify for a Pell Grant, based on family size, household income and poverty guidelines.

What hasn't changed with FAFSA^®

The FAFSA^® process remains the same for the following:

• Applicants provide income, assets and family information on the FAFSA^®.
• The number of family members in college is still a question on the form but will not be used in the SAI or Pell Grant eligibility calculations.
• The need analysis formula is unchanged: Cost of Attendance - Student Aid Index - Other Financial Assistance = Financial Need.
• An applicant's SAI is determined by one of three formulas: dependent students, independent students without dependents other than a spouse and independent students with dependents other than a spouse.

Resources

• Overview of changes
• Information for students with special circumstances
• Creating an FSA ID without a Social Security number
• Key terms, definitions and systems

Frequently asked questions