why is the fafsa changing?

From the Department of Education:

"On Dec. 27, 2020, Congress passed the Consolidated Appropriations Act. The law includes provisions that amend the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act and includes the FAFSA Simplification Act—a sweeping redesign of processes and systems used to award federal student aid. Specifically, the law makes it easier for students and families to complete and submit the Free Application for Federal Student Aid (FAFSA) form and expands access to federal student aid.” 

What’s Changing for 2024-2025:

Visual Reference Guide

Contributor: anyone who is asked to provide information on the FAFSA (student, spouse, student’s parent(s) and/or stepparents(s)) and consent (each contributor will need to consent to their information being included on the FAFSA).

Student Aid Index (SAI): The FAFSA previously calculated an Estimated Family Contribution (EFC). Now the FAFSA will produce the Student Aid Index (SAI). This name more accurately describes a number used to determine aid eligibility within programs and compared to other students. Also, this number, unlike the EFC, can be negative with the minimum SAI being -1500.

Simplification: The FAFSA will reduce in maximum questions from 108 questions to 36. And because the FAFSA on the Web is dynamic, some students won't even be presented with all 36 questions. Recent FAFSAs saw some questions dropped, and others will no longer be asked due to the way that tax and income information is now gathered. 

Tax/Income Data: Previously, students, a student's spouse (when married), and parent(s) (when students are dependent) entered their tax information or used the IRS Data Retrieval Tool (DRT) to transfer tax data from the IRS to the FAFSA. Beginning with 2024-25, all persons listing tax information on the FAFSA will be required to use the IRS Direct Data Exchange (DDX) to share tax information or confirm non-filing status. DDX gives ease to the process and reduces questions to be answered. This change also requires the student, spouse, and all parents with tax data reported to get an FSA ID (if you don't each have one already).

No benefit for having siblings in college: The FAFSA previously divided the EFC proportionally based on the number of the household in college. The elimination of this "sibling discount" will be the biggest change in aid eligibility for some students. The SAI will not use the number in college as a factor in calculation of eligibility. 

Federal Taxpayer Information (FTI): FAFSA contributors (student and spouse or parent/stepparent, as applicable) must give the U.S. Department of Education (ED) consent to retrieve federal tax information (FTI) from the Internal Revenue Service (IRS) for purposes of determining a student’s eligibility for Title IV federal student aid. If the student, spouse, or parent fails to provide consent, the student is not eligible for Title IV aid, no exceptions. The retrieval of FTI by the the IRS Data Retrieval Tool (IRS DRT), will be replaced by the Direct Data Exchange (DDX) and FTI will be stored separately in the Federal Tax Information Module (FTIM).

Custodial Parent: Is now the parent who provides you with the most financial support and will no longer be the parent with who you lived with the most over the past 12 months.

Provisional Independent Student Determination: Foster, homeless, and unaccompanied youth—as well as applicants who cannot provide parental information—will be able to complete the form with a provisional independent student determination and receive a calculated SAI.

FSA ID Update: There will be a new process to get an FSA ID for parents and spouses without a Social Security number. This will speed up FAFSA processing time as they’ll be able to submit the form online. There will be two-step verification and all FAFSA contributors must have an FSA ID to log into the online form.