Our financial planner informed us of the change in FAFSA’s calculation to receive aid. We were only able to find bits and pieces from different sources online. Anyone have an insight or an example of how this will affect the way colleges provide financial assistance? We know it eliminates the “multiple kids” in college which can be a very big deal. Will more asset/income protection calculate to offset? Thanks everyone.
Here is detailed information: NASFAA | NASFAA Deep-Dive: Changes to Federal Methodology, Other Student Aid Changes From Spending Bill. This article from a well respected financial aid guru: How FAFSA Simplification Will Change Financial Aid Eligibility.
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Thank you. This is great.
This is a disaster in the making for middle income families. Basically, we are now limited to state schools as full pay or take out loans. No concessions for having two kids in college simultaneously.
The blog below from Mass Mutual is easy to read and follow.
https://blog.massmutual.com/post/college-fafsa-changes-siblings
I am surprised that there is not much of an uproar about this but this is a big deal for us.
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I understand, but part of the reason this benefit was eliminated was because people whose kids were farther apart complained that the formula was unfair because it penalized them (a benefit they couldn’t qualify for) simply for having kids more than 3 years apart.
I would not expect most CSS Profile schools to change their formulas, many of which take into account multiple siblings in college at the same time when calculating what a family is expected to contribute. In fact, some Profile schools have already stated they won’t change their financial aid formula.
How is this a disaster in the making? ( says a mom who has sent two kids to state schools as full pay)
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What if your kid is not best suited to go to a large public university and his major is not offered at smaller state schools?
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These hypotheticals aren’t helpful.
FAFSA is primarily used to qualify for federal financial aid (Pell grants, federal work study, direct student loans, etc.). For some families, they might not qualify for as much Pell money as they previously would have. All students who file FAFSA will still qualify for the Federal Direct Student Loans (max of $27K total for most students over the 4 undergrad years)
Most FAFSA only schools (which is most state publics) don’t meet full need anyway, so there’s no guarantee that they would be affordable regardless how they calculate one’s expected financial contribution. Meaning…they often won’t get close to your student’s FAFSA EFC (future SAI).
Your kids will still be able to qualify for merit scholarships, which often have nothing to do with need.
And again, they will have the option to attend a CSS Profile school, where the formulas are not likely to change (meaning if the school currently gives a benefit for multiples in college, they will continue doing so).
Does that make sense?
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I can see this hurting those small NAIA or Div3 college kids potentially; small private schools that don’t use the CSS but rather the FAFSA. However, when one of our kids went to one of those for a 1.5 yrs; there was very little grant money given by that school even with 2 in college.
when that kid transferred to the state school, she qualified for a subsidized loan. In fact, that was the only benefit we ever saw with having now had 4 years of overlapping college kids. 1 kid got a few subsidized loan. To take that away would be annoying, but it wouldnt be a disaster for us I guess.
as far as pells go, if a family qualifies for a pell grant, both kids will qualify; the amounts may be slightly different by a few thousand now, but you have to have a really low EFC in the first place to qualify. If i were in that situation, i’d be talking to the colleges.
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Last I’d heard nearly all the changes except for a couple simple ones (like not requiring selective service registration) had been pushed out to the 2024-2025 school year FAFSA.
Update: Hi all. Just a quick updated. We called the top three schools - 1 public & 2 private (including the college my oldest attend) and inquired about the change. They all responded the same:
- They have not been informed of the changes to make any decision on revising their calculation
- If it becomes a mandate, then the school will grandfather current college students already enrolled; and/or extend to a certain year
So, I guess we will have to wait and see what happens. Thanks everyone.
“revising their calculation”
What calculation? The FAFSA EFC/Student Aid Index is not calculated individually by each school (unless something has changed with the revised FAFSA that I have not yet heard about).
“If it becomes a mandate…”
What part of any changes to FAFSA might a school have the ability to opt out of regarding federal aid?
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It’s a mandate at the federal level. It’s a done deal that will happen. Although Congress gave some flexibility in the FAFSA Simplification Act of 2021, allowing some changes to be put off (universally, not per school) until 2024 due to implementation challenges, the number in college change is not difficult; therefore, there is no reason to believe it won’t happen as scheduled in 2023. I don’t know what the financial aid people meant, but it’s possible that they were talking about how their schools might handle the change for their own institutional aid. They definitely don’t get to opt out of federal rules for federal aid.
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For the ‘two kids in college get a benefit’ this was a small group of students under the old system to qualify for a Pell grant. The EFC on the first student had to be between about $7k and $14k to qualify for a Pell if cut in half. (those with EFCs between $0-$7k would benefit by getting double the Pell , which is a good thing too but not enough to fund a year in college).
Say the EFC was $10k for one kid (not Pell qualified), if a sibling started school then both students would get a partial Pell (about $2k each). If the EFC went up to $20k, then having a sibling start school would cut the EFC to $10k, and again, not Pell eligible.
Yes, some schools would look at that $10k EFC and award some need based aid from the institution that they might not with a $20k SAI, but they can award their own money under the new system based on a higher SAI and ask if certain conditions are present - siblings in college, special circumstances- it’s the school’s money so it can set the terms for awarding it, using the SAI or another system.
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I hope so! Also that it doesn’t change in the CSS profiles of schools. Fingers crossed. What sucks in the CSS is them f’ing people over with home equity amount.
FAFSA, which does not consider primary home equity in setting the FAFSA EFC, is predominantly used to determine educational aid from the federal government, and, to a lesser degree, state governments. Profile is used by a relatively small subset of schools to distribute institutional need-based aid. Profile schools can use whatever methodology they choose to give away their own money. I don’t find it unreasonable that many of these schools want to know how much equity an applicant’s family has in their primary residence in order to view a larger picture of the family’s finances. They are not trying to f people over – they are doing their due diligence and trying to allocate a limited resource in the best and fairest way they can.
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Take two families that are identical. Both have been renting a house and have saved $300k in a savings account. The day before they submit their CSS profile, one family buys a house and moves in with the $300k. Why should they get different institutional (or possibly government) aid? The FA formulas actually favor primary home investors over other types of investments (retirement is also favored). If you are going to complain about being disadvantaged, first make sure that you are disadvantaged.
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$300k is a lot of liquid assets. My point is that if both have equal incomes but one, not in this instance, is closer to paying off their home and the value of that home has increased, this method is assuming that anyone with any sort of equity is expected to dip into that loan wise, even at an average income. If someone’s agi is X, are they then expected to pay half of that when they have other set payments like health insurance, cars, rent/mortgage, car insurance, etc? Plus food? I guess that’s why they have appeals to weed through the weeds of this. My dad who was NYPD had to do this for my sister at MIT. Literally drove up there from his tiny cape cod type house with pay stubs, etc. And if there’s multiple kids…
Actually FAFSA-only schools ignore home equity. Some CSS profile schools assess it, some don’t. And of the ones that do, it can vary as to how much home equity they assess. Some will cap it as a multiple of income.
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Once again it sounds like you are complaining when you should be happy. Colleges(some) are one of the few places that price discriminate based upon affordability. Try negotiating with some other luxury good seller by saying that you should pay less because of your income/assets. You likely will not have favorable results.
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