Delayed: Which FAFSA Changes Got Postponed
By Joe Messinger, CFP®
July 23, 2021
The Federal Government might actually be listening to us…and we’re not talking about conspiracy theories here!
We’re talking about our stance against the latest FAFSA changes, which we believe could jeopardize the financial health of countless American families. We wrote at length about this major development at the beginning of the year, and we started a petition on Change.org that received nearly seven thousand signatures.
Then, just a few weeks ago, the Office of Federal Student Aid announced that most of these changes are being delayed a full year. Whether or not our petition influenced the delay is up for debate, but we’re thrilled college-bound families have received more time to prepare for the future.
At Capstone Wealth Partners, we know how fast that extra year will fly, and we’re continuing to advocate for a full repeal of certain changes to the FAFSA form. Read on for a full overview of the new legislation, the most recent delays, and what all of this means for you.
Which Rules Got Changed (And Who They Affect)
Amidst the COVID-19 chaos and the highly politicized emergency relief bill, Congress quietly passed sweeping changes to the Free Application for Federal Student Aid (FAFSA) in December 2020. That legislation was called The FAFSA Simplification Act.
While we’re particularly concerned about one of the changes, we’re the first to admit that many of the new rules are actually quite positive. For example, the Department of Education announced their intention to shorten the ten-page, 100-question form to a more manageable three pages and 35 questions. It’s about time!
Better yet, the new changes will expand access to federal aid, helping ensure more low-income families (and even incarcerated students) will get the financial help they need to attend college.
These are undeniably positive changes, and we applaud Congress for including them in the overhaul. Make no mistake, we’re not actively protesting the entire revision; just a key part of it.
Unfortunately, many other Americans will not benefit from The FAFSA Simplification Act. In fact, families with multiple children attending college at the same time face the greatest financial risks. While these families would typically receive significant discounts incorporated into their Expected Family Contribution (EFC), the new legislation eliminates those deductions altogether.
This will effectively double the expense for parents with multiple children in college. As tuition costs continue to skyrocket, the new legislation could spell disaster for many American families.
Why The Changes Were Delayed
The Office of Federal Student Aid announced that the Education Department’s outdated technology was to blame for the postponement.
And just how old is the technology? According to Rich Cordray, COO of Federal Student Aid (under the Department of Education), nearly half a century. “To deliver on these new opportunities, FSA first needs to update the technology system that the FAFSA form is built on,” Cordray said. “Believe it or not, the current system is 45 years old…it’s just too limited to support these new changes.”
Take your time! American families will use all the delays they can get.
What Exactly Was Delayed
Here’s the good news: many aspects of the new FAFSA implementation have been delayed at least a full year. That means families with multiple children in college at the same time will continue to receive the EFC discount until the 2024-2025 school year.
Plans to replace the Expected Family Contribution (EFC) acronym with the Student Aid Index (SAI) have also been delayed, as have ambitions to reduce the number of questions on the FAFSA form.
In the meantime, however, the Department of Education is prioritizing the immediate adoption of the following changes:
- Removing the requirement for male students to register with Selective Service
- Removing the suspension of eligibility for Title IV aid for drug-related convictions while receiving Title IV Aid
- Repealing the 150% Subsidized Loan Limit (effective July 1st, 2021)
As they implement these changes throughout the year, the Department of Education will also host hearings on additional topics like borrower defense, financial responsibility, gainful employment, and public service loan forgiveness.
We expect to continue hearing about additional revisions (and perhaps more delays) in the coming weeks, and we will alert you as soon as we learn about them.
At Capstone Wealth Partners, we are committed to lobbying against the new rules so that families with multiple children in college don’t get unfairly punished. To that end, we encourage you to add your name to this petition.
While advocating for a legislation change, families must actively prepare for their college investment as early as possible. Each year, students and parents miss out on billions of dollars in financial aid by failing to file their FAFSA. Just imagine how many families with multiple college-age kids haven’t even heard about the recent legislation changes and remain totally unprepared for the future.
More than ever, families need help to weather the higher education storm.
- They need the confidence that comes from taking a fact-based approach to college.
- They need true guidance to highlight the schools that fit them best.
- They need to know exactly what they will pay.
- They need to see what graduates earn five and ten years after school.
- They need to know what their monthly student loan bills will be.
- They need definitive answers, and with the College Money Report™, you can easily get them.
While evolving legislation might move the goalposts, our tool is designed to help you shop smarter for college and maximize your return on education. Book a call today and we’ll show you how the College Money Report™ can help you get the best price on college!
June 4, 2022