The goal of the 2020 FAFSA Simplification Act is to make it easier for students to apply for financial aid by significantly reducing the number of questions on the Free Application for Federal Student Aid (FAFSA) form. The law also includes substantive changes in the underlying formula that determines the amount of financial aid for which students are eligible. Those changes will affect the size of students’ Pell Grants and the amount of additional financial aid that higher education institutions can provide.
The main provisions of the law that will affect how much students pay for college include:
- Eliminating the discount students receive when they have siblings enrolled in college.
- Increasing the income cutoff used to automatically award the maximum Pell Grant.
- Increasing the amount of student and parent income that is exempted in determining financial need.
- Reducing parents’ expected payments for students with low incomes.
These changes, and others, will have profound effects on students’ eligibility for financial aid. Some students may pay more and others less. How students’ financial aid eligibility will change with FAFSA simplification depends on many factors, including their family’s financial circumstances, where they attend college, and especially how many siblings they have in college.
This report from the Brookings Institution details these changes and their likely impact on the net price of college, after factoring in financial aid, for dependent students attending four-year institutions.