The Consolidated Appropriations Act enacted in December 2020 included the text of the FAFSA [Free Application for Federal Student Aid] Simplification Act, which aims to simplify the federal student aid application process and makes substantial changes to the needs analysis formula under the Higher Education Act. The changes will go into effect in October 2021. Under the new law, tax non-filers and students whose family Adjusted Gross Income is below certain levels will be eligible for the maximum Pell Grant award. The Expected Family Contribution or EFC is replaced by a new Student Aid Index or SAI, which for the first time can be a negative number. Untaxed income items are also streamlined on the FAFSA, which will permit the use of direct data sharing between the U.S. Department of Education and Internal Revenue Service, and those receiving means-tested benefits and those with incomes below $60,000 who file simple tax returns will qualify for a simple needs test and will not be required to provide asset information.

NCHER members will need to understand what these important changes mean as they counsel students and families for the upcoming academic year, and the impact that such changes will have on federal and state grant aid programs and private education loans. The 2021 Impact of the FAFSA Simplification Act webinar is free to NCHER members, so register today!