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Important FAFSA Changes for 2024


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December 31, 2023

The much-anticipated redesign of the Free Application for Federal Student Aid (FAFSA) is set to launch on December 31st, introducing significant changes that will impact college financial aid for the 2024-25 academic year. The new form, aptly named "Better FAFSA," is expected to simplify the application process for students and their families, marking a major overhaul that aims to enhance accessibility and accuracy in financial aid distribution.

  • One of the most noteworthy alterations involves a condensed timeline for the FAFSA release. Traditionally unveiled in early October, this year's application was postponed until December 31st to incorporate the sweeping modifications. The compressed schedule poses challenges for both colleges and applicants, requiring quicker turnaround times for application reviews, financial aid offers, and crucial decisions on college attendance.
  • A pivotal enhancement for 2024 is the shortened and simplified application, featuring a direct transfer of tax information from the IRS. With over half the number of questions compared to its predecessor, the revamped form aims to alleviate the burden on applicants, ensuring they only answer pertinent questions. The new requirement for IRS data exchange is expected to enhance efficiency, particularly for students with straightforward tax situations.
  • Another notable change is the replacement of the term "Expected Family Contribution" (EFC) with "Student Aid Index" (SAI). This modification seeks to eliminate confusion surrounding EFC, providing a clearer representation of the financial strength of students and their families in the context of financial aid awards.
  • The redesigned FAFSA also brings about significant alterations in Pell Grant eligibility, with an additional 600,000 students qualifying for the grant and 1.5 million existing eligible students now eligible for the maximum award. This expansion of grant eligibility is considered a key highlight, potentially benefiting millions of low-income students.

However, not all changes are universally embraced. The elimination of the "sibling discount" is a notable drawback for families with multiple children in college. Previously, families received a financial break for each additional enrolled child, but this provision has been discontinued, potentially reducing aid eligibility for such families.

Moreover, several formula updates introduce nuanced changes, such as the possibility of a negative Student Aid Index, increased income protection allowance, and adjustments for divorced parents and families with small businesses or farms. These modifications aim to refine the accuracy of financial aid calculations, but their impact on individual cases remains to be seen.

In summary, the forthcoming FAFSA redesign represents a landmark transformation in the financial aid application process, promising a more streamlined and user-friendly experience for students and their families. As the education landscape braces for these changes, the overall goal is to ensure that more students receive financial aid, ultimately facilitating broader access to higher education.

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About the author

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Billy Daniels

Vice President, Private CFO®

A native of Mobile, AL, Billy moved to Atlanta shortly after graduating from The University of Alabama in 2013. Billy joined the oXYGen Financial team as a Vice President in 2019 with 4 years of previous experience in the financial services industry. In his spare time, Billy is an avid golfer, watches as many Braves games as he can, and pulls for his Crimson Tide on Saturdays in the Fall. Billy currently lives in Peachtree Corners, GA with his wife Molly, daughters Margot and Charlotte, and their dog Beau.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. Investor Disclosures: https://bit.ly/KF-Disclosures

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Background and qualification information is available at FINRA's BrokerCheck website.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. https://Bit.ly/KF-Disclosures

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