Tighter Timelines for College Financial Aid Applicants
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What is the main topic discussed in this episode?
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Here's your money briefing for Monday, December 4th.
When does the new FAFSA become available and why does the timeline change?
I'm J.R. Whelan for The Wall Street Journal.
How has the FAFSA been simplified and how many questions were removed?
For many college students and their families, financial aid can be the key to a higher education. But this year, they'll face a new set of challenges, a revamped application form, and a new timeline for learning how much aid they've received.
Families may not find out about their awards until March or later because most schools aren't going to get this information until later in January, and then they have to run it through their own systems.
Our personal finance reporter, Oyen Ededoyen, will help us navigate the new financial aid application process after the break.
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What formula changes affect families (sibling discounts, farms, and small businesses)?
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Why does the FAFSA delay stem from the FAFSA Simplification Act and who benefits?
Families will be able to apply for college financial aid starting on December 31st when the Free Application for Federal Student Aid, or FAFSA, becomes available. Wall Street Journal personal finance reporter Oyen Adedoyen joins me. So, Oyen, we're hearing that this year's FAFSA will be simplified. What will be simpler?
The Education Department has trimmed down this form by more than 50%. So where it used to be 100 questions, it's now gone down to about 36 or even less for some families.
Oh, that could be a time saver.
For sure.
How will 401(k) treatment change on the FAFSA and how can families respond?
They've also made it a lot easier to connect your IRS tax forms to the application. That way, that information from the IRS could fill in a lot of those blanks.
Now, aside from those welcome changes, you report there are others that could cause confusion. How so?
Well, for starters, the FAFSA is coming out about three months later than usual. So it typically comes out on October 1st, but this year it's coming out on December 31st. They've also changed some things when it comes to the formula for calculating a family's need or eligibility for aid. One of those things includes families with more than one child in college at the same time are no longer going to qualify for a so-called discount.
What should families do now to prepare (FSA ID, documentation, where to get help)?
Another thing is that the value of family farms and small businesses are now going to be considered as assets in the form.
Now, you mentioned a moment ago the form is coming out about three months late, December 31st. Why the delay?
This is due to a law from 2020 that created a complete overhaul of the FAFSA. It's called the FAFSA Simplification Act. And so because of this, the FAFSA is going to be accessible to more families. About 610,000 more students from low-income backgrounds will receive federal Pell Grants. And 1.5 million more students will have access to the maximum Pell Grant award. But because they've had to change so many things in the system, it took a lot longer for the form to be complete.
You also mentioned a discount going away for families with more than one kid in college at the same time.
When can families expect award decisions and how might the delay affect college choices?
That's a lot of families. Any way to get around this?
Well, most colleges and universities are adhering to the FAFSA's new rules, but I know at least one university that set up a grant. The University of Dallas has its own grant that helps freshmen with siblings in college this year.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:36
2
When does the new FAFSA become available and why does the timeline change?
0:36–0:40
3
How has the FAFSA been simplified and how many questions were removed?
0:40–1:31
4
What formula changes affect families (sibling discounts, farms, and small businesses)?
1:31–2:00
5
Why does the FAFSA delay stem from the FAFSA Simplification Act and who benefits?
2:00–2:31
6
How will 401(k) treatment change on the FAFSA and how can families respond?
2:31–3:16
7
What should families do now to prepare (FSA ID, documentation, where to get help)?
3:16–4:03
8
When can families expect award decisions and how might the delay affect college choices?
4:03–8:03
Speakers
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