Understanding New FAFSA Rules for College Financial Aid – A Guide for Families
It's that time of year again - pictures of high school seniors, wearing their soon-to-be college t-shirts, are flooding your social media feeds. As a parent with children in high school or college, you're likely familiar with the Free Application for Federal Student Aid (FAFSA) and concerned about funding your child's college education. In this blog post, we'll explore the recent FAFSA rule changes and how they can affect divorcing or separating families. Stay informed to make well-informed decisions!
Changes to the FAFSA Application Timeline
Starting with the 2023-2024 academic year, the FAFSA submission deadline has moved up to October 1 of the previous year. By applying earlier, families receive financial aid offers sooner, granting them additional time to consider options and make informed decisions.
Changes to the FAFSA Formula
The FAFSA formula now incorporates updates reflecting changes in the economy and cost of living. Additionally, a simplified version has been introduced, considering only income and family size to calculate the expected family contribution. This simplification benefits low-income families, streamlining the financial aid process and enabling them to secure the necessary assistance for their children's college education. Moreover, the FAFSA now takes into account the number of college-going children in a family, potentially increasing available financial aid for families with multiple students.
Changes to the Treatment of Divorced or Separated Parents
Previously, the FAFSA required information from both parents, regardless of their marital status. However, the FAFSA now allows students to report only one parent's income and assets under specific circumstances. These include parents who are divorced or separated and do not live together, where the reporting parent has provided more than half of the student's financial support in the previous year, and if the reporting parent has not remarried. This change is crucial for families with significant income disparities or when one parent is not contributing to the student's education.
Changes to the Treatment of Assets
Under the revised FAFSA formula, certain assets are now treated differently. Notably, assets in 529 college savings plans owned by the parent or student are factored into the expected family contribution calculation. Conversely, assets held in 529 plans owned by grandparents or other relatives are not considered. This modification allows families to save for college while preserving eligibility for financial aid.
The recent changes to FAFSA rules aim to benefit a wide range of students and families seeking financial aid for college. By understanding these updates, you can navigate the process more effectively and maximize the available assistance. Stay informed, plan ahead, and ensure your child's college dreams become a reality.
To apply for financial aid for college, students should visit the official FAFSA website: https://studentaid.gov/h/apply-for-aid/fafsa
If you have questions about how college expenses for divorced or divorcing families should be shared or questions about the new FAFSA rules and how it may impact your separation or divorce, the family law department at Hoagland Longo can help. The family law attorneys at Hoagland, Longo, Moran, Dunst & Doukas, LLP are fully informed and can assist you in understanding the intricacies of this law, or any others, and how it impacts you and your family. Should you have any questions or wish to schedule a free initial consultation, please do not hesitate to contact Andrea Mackaronis at amackaronis@hoaglandlongo.com or at 732-545-4717.