Facing New Barriers: The Impact of the New 2024 FAFSA on Low-Income Students

By Rachel Livingston, Vice President of Programs, and Joanne Reyes, Chief Executive Officer

Navigating the Free Application for Federal Student Aid (FAFSA) has always been critical for millions of first-generation, low-income, and college-going students and their families. Filing this application determines their eligibility to receive federal financial aid to pay for higher education. This year, based on the Congressional mandate from 2020, measures that were put in place intended to simplify and improve the ability of students to access these crucial funds. However, the rollout of the Better FAFSA for the academic year 2024-25 has also introduced new complexities that disproportionately impact low-income, first-generation students and families and mixed documentation households. 

Despite efforts to support FAFSA completion and a California Department of Education requirement that mandates that school districts, charter schools, and county offices of education require high school seniors to file the FAFSA or Dream Act application, many students and families are still struggling to complete it. Currently, data shows that completion rates are down 49% compared to this point last year.

Delays In Rollout 

The delay in the rollout of the new FAFSA has raised concerns about colleges’ ability to offer comprehensive financial aid packages to students based on their FAFSA submission and in turn, students’ ability to decide on their choice of college attendance. Normally, the application process opens up in October, and while the form technically opened on January 1, it was not securely widely accessible until February. The impact and implications on low-income students seeking financial assistance are profound and can make or break their chances of pursuing higher education. The cost of attendance and aid offered is often the most important consideration in deciding where to attend or whether or not to attend. While some colleges have made an effort to address the situation by either moving their decision deadlines to mid-May (traditionally on May 1) or by guaranteeing a baseline for financial aid for low-income students, these actions are college-by-college and do not address the systemic challenge this new FAFSA has posed.

FSA ID Creation For Parents

A common issue we are witnessing among our first-generation students is the need for both them and their parents to create an FSA ID. In the previous version of FAFSA, a parent did not need a unique FSA ID, which requires a Social Security Number (SSN), for their child to submit the form. While most of our students have an SSN, many come from households with mixed documentation where one or both parents lack an SSN. Not having an SSN forces the students and parents into a manual process, which delays the process even further. Mixed documentation families are discouraged from completing the FAFSA due to concerns that their private information will be shared at the federal level, where protections for undocumented individuals differ from those at the state level. Students living in mixed-documentation households are often the most in need of this aid. The fact that they must process their application manually implies they will not know how much financial aid they will receive to make their decisions. It could also mean that a greater number of our students will enroll in community college, which statistically lowers their chances of graduating.

More Than One Going To College

The new way the U.S. Department of Education (ED) plans to calculate the Student Aid Index (SAI) will also likely have an adverse effect on our students. While it aims to more accurately assess financial needs, it also brings changes that disadvantage low-income students. Though some changes may expand eligibility for need-based federal Pell grants, others remove contextual circumstances that historically helped families with multiple children in college obtain aid. For those households who are already in a tremendous amount of financial hardship, not considering the impact of more than one college-goer in a household holds a greater consequence for families where there is simply little to no available capital to invest in a college education.

Current College Students Face Uncertain Aid

We shouldn’t forget that FAFSA also needs to be completed by currently enrolled college students, not just high school seniors who will be new college students this fall. Thus, the same issues above apply to them too — with the added bonus of having made an initial college attendance decision that factored in how much aid that college offered them, only to have this potentially change due to the new calculation of aid awards based in the new FAFSA. Some of our students may risk a decrease in the amount of financial aid they have been receiving, making the finish line that much more complicated.

Money On The Table

To make matters even more complicated, ED only recently announced they will make updates to account for inflation that will give students access to an extra $1.8 billion in need-based aid for Pell grantees. And while on the surface this sounds like a great development, it also means that ED miscalculated our federal aid by $1.8 billion. Since they just caught this mistake, we also don’t know the implications of how long it will take to recalculate these tables, and thus, how much more our students’ aid will be delayed. This will also affect students applying to private schools and endowments which base their scholarships on FAFSA filings. 

What You Can Do

It may seem daunting to address an issue with such far-reaching effects, but it’s up to us  — those who care deeply about providing equitable education to underserved youth — to uplift these issues to elected officials and policymakers, who influence how these policies are designed and implemented. We can also uplift these stories to those in the media, who are covering bits and pieces of this complex situation in local and national news coverage.

We also need your help to support our critical operations. Our College Counselors and College Success Advisors are working around the clock to help students overcome the challenges baked into this process. In fact, thus far, our team has spent four times as much time as we did this time last year to help our students successfully submit their FAFSA. And, this journey is far from over because, by the time you read this blog (in the second week of March), students will still not have been able to fully complete the rest of their FAFSA until the U.S. Department of Education transmits the submitted data to the various colleges. College then will need to match the applicant data with their admissions rosters to begin to offer aid awards. More time will be spent with students to update and complete their submissions after this, before beginning conversations with them about choosing their best-fit colleges. 

Without your generosity, we would not be able to offer our support and expertise to our students and our school partners. We have incredibly knowledgeable, experienced, and unendingly patient college counselors and advisors to not only help students with the nuts and bolts but importantly, help them hold onto their hopes and dreams when it may seem impossible.

Our students need support more than ever to get through this trying time. We urge you to uplift your voices so the new process of applying for critical financial aid doesn’t become an ongoing barrier that widens the equity gap.

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