Congress rewrote the system that determines the amount of federal financial aid given when it passed the Free Application for Federal Student Aid (FAFSA) Simplification Act of 2020. However, questions remain about how the new formula, which is supposed to go into effect on July 1, 2024, will impact students and families.
In remarks before a Senate Committee on Appropriations subcommittee hearing on May 11, Education Secretary Miguel Cardona indicated that the new need analysis formula will result in 600,000 more students becoming eligible federal student aid.
In a letter last week to Cardona, ACE and 16 other associations wrote that as they understood it, the large majority of this increased eligibility is through the Pell Grant program and that 1.7 million more students will be in line to receive the maximum Pell Grant award. And while the groups fully support the expansion of aid, the need analysis formula may alter which students are eligible for subsidized loans and campus-based, state-based, and institutional aid programs.
The associations are requesting that the secretary conduct a comprehensive examination of how the new formula will impact students and families and to work closely with institutions to help them better serve students given the changes to the FAFSA need analysis formula, particularly since the FAFSA for academic year 2024-2025 will not be released until mid-December at the earliest.
“The Department has made notable efforts to provide transparency into the likely impact of the changes to the FAFSA form and methodology, but institutions still lack a clear understanding of how these changes will impact current and future aid-eligible students,” the groups wrote. “As institutions often package aid offers to students well before December, having the clearest possible understanding of the likely impact of changes to the FAFSA is critical in determining how institutional resources should be best allocated to support students.”
The department plans to assemble more data. But in the absence of clear, comparative data right now, the letter notes, more information is needed.