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Fafsa May Be Tricky This Year for College Students and Parents

November 11, 2021
Once again we’ve reached that time of year when parents and students need to fill out the FAFSA for financial aid. However due to some rule changes and the lingering economic effects of the pandemic, completing these documents may be more complicated than usual.

This article, by Cheryl Winokur Munk of The Wall Street Journal provides important information on some of these rule changes and additional steps families may need to take to maximize their financial aid.


Fafsa May Be Tricky This Year for College Students and Parents

It is Fafsa time again, when parents and students fill out the required financial disclosure for college financial aid. For some parents, the economic environment—as well as various changes in the rules—makes it especially important that they understand the process this year.

The 2022-23 Free Application for Federal Student Aid, or Fafsa, opened to families on Oct. 1. It uses financial information from applicants’ 2020 tax returns, but some families’ financial circumstances may have deteriorated since then due to the pandemic and lockdowns, various weather-related disasters or other factors. If that’s the case, families should contact the financial-aid office of schools they’re applying to or attending and ask that their changed financial circumstances be taken into account.

It’s advisable for these families to contact the aid office soon after filing the Fafsa, so the aid calculation isn’t delayed—especially if a prospective student expects to weigh offers from several colleges.

Changes in circumstances

Families should be prepared to provide supplemental information that can detail their change in circumstances. The type of documentation will vary depending on what has changed, but can include things like bills, signed letters from caregivers or medical providers, court documents, termination letters, proof of unemployment benefits, pay stubs, and out-of-pocket repair costs after a natural disaster.

Families should also contact the aid office if a parent or parents collected unemployment due to the pandemic and filed their 2020 taxes before Congress changed the rules to allow them to keep some of that income out of their adjusted gross income. In these cases, families should ask their student’s school or prospective schools if their aid award can be adjusted favorably, says Karen McCarthy, vice president of public policy and federal relations at the National Association of Student Financial Aid Administrators.

Prospective students who are applying to several schools need to contact each school’s financial-aid office individually.

Also this year, there are a few other important considerations for families seeking financial aid. Males no longer have to register with the Selective Service System to be eligible for federal financial aid. In addition, having a drug conviction will no longer affect a student’s ability to seek financial aid.

Other Fafsa modifications that families might have heard of are coming but won’t affect applicants for aid in the 2022-23 school year. The Consolidated Appropriations Act of 2021 authorized significant changes to federal student-aid policy, including Fafsa simplification, but many of the bigger changes, including a streamlined form and expanded federal Pell grant eligibility, have been pushed back a few years.

Worth filling out

Experts say families should fill out the Fafsa even if they think they won’t qualify for aid. Only 68% of families with undergraduate students completed the Fafsa for academic year 2020-21, a decline from the prior two years, according to Sallie Mae’s How America Pays for College report.

Families may opt not to fill out the Fafsa for any number of reasons. A recent poll from LendingTree’s Student Loan Hero unit found that 85% of undergrads polled didn’t know that the Fafsa determines eligibility for aid like grants and work-study in addition to loans.

“The Fafsa unlocks the gateway to millions of dollars in federal student aid, including scholarships, grants and student loans,” says a spokeswoman for ECMC Group, a nonprofit corporation that focuses on student success.

Though the latest Fafsa application doesn’t close until June 2023, applying sooner can have measurable benefits in terms of awards from states and colleges that have limited funds to dole out. “Applying sooner versus later is a good idea—much of the aid available is awarded on a first-come, first-served basis,” the ECMC spokeswoman says.



Cheryl Winokur Munk
The Wall Street Journal

Gene J. Puskar/Associated Press


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