June 28, 2023

FAFSA Simplification Act: Ways Your Institution Can Prepare

While financial aid offices across the country are preparing for this fall's 2023 semester, they are also hard at work preparing for the FAFSA Simplification Act from the Department of Education, which is on its way for the 2024–2025 academic year. While these updates may be simple in name, as in any situation in which changes come about, there are considerations to be made about the impact, and we are here to help campuses make the process smoother. Throughout this article, we will look at some key changes as well as ways we can partner with campuses to best implement these changes. 

Key Updates and Changes 

Availability 

FAFSA availability is one of the most significant changes. Since 2018, students have had access to the FAFSA on October 1st; however, with these updates, it is now known that the simplified FAFSA will be released later than October. Multiple processes will be affected, including early awarding and decision-making from the perspective of students. In the past, institutions could encourage and execute early application decisions, but those will be delayed from October until at least January. It is critical for schools to anticipate these delays and adapt accordingly.

Pell Grant Eligibility 

Pell Grant eligibility will also change significantly. While the changes are intended to increase eligibility, they will have a number of unintended consequences in a variety of areas. The formula for determining eligibility is one influencing factor that is changing.

At one of our partner institutions, Virginia Commonweath University's Associate Vice President of Student Financial Services, Norm Bedford, provided a wonderful illustration of how the changes to the new student aid index will affect awarding and discussions with financial aid counselors.

“Under the old federal methodology with the expected family contribution formula (EFC), there was a beautiful table, and you would look up the EFC and you would see where you slotted in, whether you had a full-time, three-quarter time, half-time or less than or less than half time Pell Grant. It would just line up that XY matrix and that was a great conversation tool for financial counselors, and that worked well. We don't really have that tool right now. I think that is going to add to some complexity or some more conversations that may take longer.”

Bedford notes that these changes could bring with them more questions from parents and students regarding their eligibility, which may put a strain on the financial aid office's already limited resources.

In addition to the changes in eligibility, institutions that provide additional or supplemental need-based aid tied to the Pell index or current family contribution methodology may need to review those programs and plan for a significant change in their operating budget. It is easy for schools to overaward, overspend, and exceed their budgets if they do not pay attention to the expanded Pell eligibility.

Simplified Application

The new simplified FAFSA application will require active consent from the student and parent to be processed electronically. Failure to consent will result in the application being processed manually. As a result of this change, institutions need to ensure the updates are communicated so that manual processing does not increase, and internal resources are not overburdened. 

Partnering for Success 

Each of these factors, as well as many other changes to come, bring their own challenges to financial aid offices. In discussions with our current and prospective partners regarding these updates, we consistently identify two areas where we can work together to make this process as seamless as possible: 

1. Engage students as early as you are able.

   Communication is essential in informing students (and parents) about changes that will affect them in the new FAFSA application process. Keep in mind that these changes will affect not only new students, but also returning/continuing students. Proactive outreach with messaging such as the FAFSA's availability date and/or changes in the consent process for faster processing could go a long way. Simple text messages can be used for outreach; however, phone calls can increase the likelihood of questions being resolved. 

   Another strategy could be targeted communication and early package analysis based on the new SAI (Student Aid Index) of students who require extensive aid coordination, such as athletes, ROTC, and state scholars. Scalability is one of the biggest challenges to this type of work–as we discussed, financial aid offices already face resource constraints. Anthology’s Engagement Campaigns can not only provide resources to coordinate and perform this outreach, but also help them strategize to get the most out of this outbound support.  

2. Prepare technology and infrastructure

   With the upcoming changes, now is the time to review all parts of your financial aid infrastructure - from software to recourses and processes - to ensure your institution is internally prepared. As noted above, the changes will impact not only the application process, but also verification and packaging.

   Anthology Student Verification is an out-of-the-box software solution dedicated to ISIR verification process automation, helping schools stay in compliance with these changes to verification requirements and any further Department of Education regulatory changes in the future. 

   As noted, questions will be on the rise with these updates, and we know that limited staff resources are an issue that many financial aid offices are already addressing. An impactful way to assist with this need for support is partnering to add in assistance for student (and parent) questions to be answered 24/7 through multi-modal support. Anthology's One Stop can provide scalable inbound support via phone, chat, and web support to address these questions and provide answers.

We know that these changes have a significant impact on institutions as well as students and their families. Our teams are ready to help your institutions develop a strategy and plan for what we know is your top priority: serving your students.