Preparing for the Updated FAFSA: Key Information for Community Foundations

The Free Application for Federal Student Aid (FAFSA) is undergoing significant changes in preparation for the 2024-2025 award year. These changes will impact students in various ways, including the application process, communication of aid eligibility, and the formula used to determine that eligibility. As community foundations play a crucial role in supporting students' educational aspirations, it's important to understand these changes and how they will affect your scholarship programs.

1.  Updates to the FAFSA Application: What You Need to Know

The forthcoming updated FAFSA application, expected to be released in December 2023, will introduce notable modifications that will influence how students apply for financial aid. These changes encompass two main aspects:

• Form Structure: The structure of the FAFSA form itself will evolve. This update might require scholarship providers to adjust their application requirements to align with the new form's sections and data fields.
• Calculation Formula: The methodology used to determine students' eligibility for financial aid will be revamped. Notably, the familiar Expected Family Contribution (EFC) will be replaced by a new metric called the Student Aid Index (SAI). As a scholarship provider, if you have traditionally asked for students' EFC values in their applications, you should update your materials to reflect the impending use of SAI. You can find more insights about the transition from EFC to SAI in this informative article.

2.  Implications for Scholarship Providers

The changes in the FAFSA process are poised to have ripple effects across various aspects of scholarship provision:

• Timing Impact: The anticipated delay in the release of the updated FAFSA might lead to delays in college financial aid eligibility calculations, state and federal grant eligibility determinations, and, importantly, the operations of community foundations.
• Transition to SAI: For scholarship providers who previously relied on EFC for determining financial need, transitioning to the new Student Aid Index (SAI) will be essential. During this transition period, you can consider asking students to provide data from the Federal Student Aid Estimator until the SAI calculation becomes available. The Estimator might not yet have the updated SAI calculation, but it is expected to be updated in the near future.
• Adapting Evaluation Processes: As the changes affect all stakeholders, approaching this year's evaluation process with flexibility is advisable. Expect the need for additional staff time to accommodate potential edits to scoring rubrics, considering the variance in SAI values, which can even be negative.

3.  Exploring New Approaches

This transition presents an opportunity for community foundations to explore innovative approaches:

• Internal Calculations: Consider implementing a new internal calculation and rubric for assessing financial need. This could involve requesting additional information such as Adjusted Gross Income (AGI), scholarships received, and expected tuition expenses. You might involve staff or volunteers to perform these calculations or integrate the process into your software.
• Essay-based Evaluation: Another option is to request an essay where students outline their college funding strategy and any financial hardships they anticipate. This approach could provide valuable insights into students' perspectives and circumstances.

4.  Resources for Further Information

To deepen your understanding of these changes and their implications, several resources are available:

• Upcoming Changes to the FAFSA: What Scholarship Providers Need to Know.
• FAFSA Updates and Timeline
• A Simpler FAFSA is Coming. Here’s What to Expect.
• College Aid Pro Breaks Down FASA Changes
• Strada Grant to Offer Support

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