If you have a student attending college for the 2022-2023 school year, get ready to complete your Free Application for Federal Student Aid (FAFSA). The FAFSA will become available on October 1st for the 2022-2023 school year and will be based on income information from your 2020 tax return. Grants and assistance are typically awarded first come, first serve so you’ll want to complete it as soon as possible to get to be at the front of the line!
Even if you’ve saved enough money to pay for college, you should still complete the FAFSA each year. The FAFSA factors in more than just your income. It also looks at the size of your household, whether your family owns a business, parental age and many other factors so it is possible that your student may qualify for potential free money. Also, you want to be prepared in case your circumstances were to change. By completing the FAFSA, the student is already in the financial aid system and can more easily access help from the financial aid office if need be. Additionally, if your student(s) receive(s) scholarships of any kind from the university, you are in a position to appeal that offer and ask for more assistance. An already completed FAFSA can help that process along.
To find out more about how different types of assets impact your child’s financial aid eligibility, click HERE.
THERE ARE FAFSA CHANGES COMING!
The coronavirus relief bill that was signed into law near the end of 2020 (The Consolidated Appropriations Act) included changes to the Free Application for Federal Student Aid (FAFSA) that will go into effect for the 2024-2025 school year. That means that the FAFSA for the 2024-2025 school year will be completed in 2023 and utilize the tax return income information for tax year 2022. (Not confusing at all!) That means, if your child will attend college in 2024-2025, you need to be thinking about your income for NEXT YEAR.
Here are some of the changes you can expect:
- The form will be simplified! The amount of questions will be reduced from over 100 to 36.
- Distributions from non-parent owned college savings plans will not count as income for the student for the FAFSA test.
- The Income Protection Allowance (IPA), which shields a certain amount of income from the Expected Family Contribution (EFC), will be increased.
- The term Expected Family Contribution (EFC) will be replaced by Student Aid Index (SAI).
- For divorced parents, the parent that provides the most financial support will be required to complete the FAFSA.
- The new calculation will no longer take into consideration how many children in your household are in college at the same time.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Lauren Tompkins and not necessarily those of Raymond James.
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