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The Free Application for Federal Student Aid, or FAFSA, is slimming down.  

For the 2024-25 school year, FAFSA will be reduced to just 36 questions from 108, including detailed financial information, and it will be easier to import income data from tax records. Along with the pared down form, the Department of Education is changing its formulas to determine who will qualify for aid and how much they’ll receive. The changes fulfill legislation passed in 2020 aiming to make student aid easier to get.    

The goal is to make the process easier, but the path there is riddled with complications. First, the new form will only be available in December, at least three months later than usual, which cuts the amount of time some applicants may have to complete their forms. Then, there are the new formulas to emphasize wealth instead of cash flow in determining what people receive. Some critics say this shift means less money for families with more than one child or who own a farm or small business. 

“These changes, and others, will have profound effects on students’ eligibility for financial aid,” nonprofit thinktank Brookings said earlier this year in an analysis. “There will be winners and losers.” 

What 2024-25 FAFSA changes should people expect? 

The most important changes include: 

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• FAFSA won’t open until December, instead of the usual Oct 1. 
• Both students and parents must create a Student Aid Account to get an FSA ID before completing the form. An FSA ID is an account username and password combination.
• Allow at least three days because, in the new process, the Social Security Administration will require verification of FSA IDs before tax information can be accessed. Students and parents must log in to the FAFSA separately to complete each of their respective sections. 
• If parents are divorced or separated, the parent who provided the most financial support in the last calendar year will now complete the FAFSA. 
• The number of students a family has enrolled in college will no longer factor into the FAFSA calculation. 
• The net worth of family farms and small businesses will now be required as part of the application. 

How might these changes negatively affect you? 

The biggest changes people will notice, include: 

• The later start in December will cut the time families have to submit FAFSA, which will still have a final deadline of June 30, 2025. That’s a long deadline but can become an issue when states and individual colleges set their own deadlines, separate from the federal deadline. Some of those are as early as January after the FAFSA release.  

“Those state and institutional deadlines will have to get pushed back a little, have some flexibility,” said Bill Debaun, senior director of data and evaluation at the National College Access Network (NCAN), a nonprofit membership and advocacy association. 

• The Expected Family Contribution (EFC) becomes the Student Aid Index (SAI) and will still be subtracted from the cost of attending to determine how much aid you might need, but it will no longer be divided by the number of students a family has in college. That means most families with more than one student in college will be eligible for less financial aid. 

For example, if your EFC was $20,000 last year, the amount was divided by the number of students enrolled in college. So, if you have two children attending college, your EFC was $10,000 per student. In the future, your SAI will be $20,000 per student, which reduces the amount you might need to attend. 

The amount of aid from schools that these students will be eligible for “could be reduced by thousands, and perhaps tens of thousands of dollars, relative to the current formula,” EconoFact, a publication that analyzes economic and social policies, said.    

Brookings estimated that almost 900,000 students with one sibling in college will maintain eligibility for financial aid under the new formula, but those students stand to lose almost $3,000 each in institutional grant aid, totaling $2.5 billion. Another 157,000 will lose all eligibility, which could have provided up to $7,900 each in aid, totaling $1.2 billion, it said.   

• Families with an adjusted gross income of $60,000 and own farms or small businesses with fewer than 100 employees will have to include their farms or businesses as part of their financial assets that can be used to pay for college and reduce their need. 

A family with a farm valued at $1 million would be expected to contribute more than $7,600 toward an education. Under the new rules, that same family would be responsible for more than $41,000, potentially making those students ineligible for some federal and state aid programs and more reliant on student loans.   

Basics:How can I pay for school? Complete FAFSA. What FAFSA is, who's eligible and when to do it.

Are there any benefits to these changes? 

Yes.  

1. FAFSA dates return to normal the following 2025-26 year, opening on Oct. 1, 2025, and closing on June 30, 2026. So, you’ll have more time to complete a simpler form. The shortened, streamlined FAFSA is expected to lead to increased completion rates and improve college access and affordability by making billions of dollars of financial aid available to students. A study by NerdWallet found that the high school graduating class of 2018 missed out on $2.6 billion in available federal aid because eligible students did not complete the FAFSA.   
2. Lower-income families will be eligible for more aid under the new formulas, which include: 

• Larger income protection allowances (IPA): IPA covers a family’s basic daily living expenses and is excluded from the financial aid eligibility formula. Larger IPAs lower the income students and parents can contribute to college expenses, which will increase their financial aid eligibility.  

IPA will increase by 20% for parents, up to about $2,400 (35%) for most students, and up to about $6,500 (60%) for students who are single parents.  

• Automatic Pell Grants based on income and household size: Families making less than 175% and single parents making less than 225% of the federal poverty level will receive the maximum award, while minimum grants will be guaranteed to students from a household earning below 275%, 325%, 350%, or 400% of the poverty level, depending on the household structure. This makes it quicker and easier for people to know they’re eligible. The Pell Grant is the federal government’s primary grant aimed at low- and middle-income students, helping more than 6 million students afford college in the 2021-22 school year. 

State Higher Education Executive Officers, a national association that helps develop education policies, projects that 42.9% of students previously ineligible for a Pell Grant may become eligible under the new calculation. That's approximately 2.1 million more students than under the old formula, it said.   

• Restoring Pell eligibility: Incarcerated students and students who have been convicted of drug-related offenses will be eligible again for financial aid.  
• A negative contribution score: Family contribution amounts could be as low as minus $1,500, instead of zero. Although federal financial aid cannot exceed the cost of college attendance, the negative score could be used to distinguish among the neediest students, allowing states and institutions to more accurately target need-based aid. 

Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.