Every year, the Free Application for Federal Student Aid (FAFSA) is opened on October 1st for the following Fall school year. The FAFSA is used to determine a student’s eligibility for financial aid, grants, and scholarships. While completing it is optional, this form is required to obtain any kind of federal aid, including federal grants and student loans.
Since navigating the application can sometimes be tricky, this blog will walk you through some things you need to know in completing your 2022-2023 FAFSA, including how the recent FAFSA Simplification Act affects you or your child.
Who Should Complete the FAFSA?
We encourage everyone, no matter your financial standing, to complete the FAFSA each year when the application becomes available. Completing the application will allow you to review all your options before deciding on how to fund your or your child’s education.
Below you’ll find three types of federal student aid that could be offered by the government depending on your FAFSA application. Many states and schools also use FAFSA information to award other types of aid.
Types of Federal Student Aid Determined by Your FAFSA
- Grants: Money you do not need to repay; often based on financial need.
- Federal Pell Grant
- Federal Supplemental Educational Opportunity Grant
- Teacher Education Assistance for College and Higher Education Grant
- Iraq & Afghanistan Service Grant
- Loans: A determined sum of money you eventually must pay back in full, with interest.
- Direct Subsidized Loan
- Direct Unsubsidized Loan
- Direct PLUS Loan
- Federal Perkins Loan
- Federal Work-Study (FWS): Provides part-time jobs for undergraduate and graduate students with financial need.
FAFSA Simplification Act – How Does it Affect Me?
The FAFSA Simplification Act was enacted in late 2020, which made changes to many Federal student aid and loan programs, including the FAFSA. Although the changes are being implemented in phases through the 2024-2025 award year, notable changes take effect this year.
In 2021, the FAFSA was shortened to make it more user-friendly and easier to complete. The number of questions on the FAFSA was reduced from 108 to a maximum of 36.
In October 2022, a few more adjustments will be implemented.
- It is no longer a requirement for students to register with Selective Service to receive federal student aid.
- Drug-related convictions no longer affect federal student aid eligibility. Students are still required to answer “yes” if they were convicted for a drug offense while receiving federal student aid; however, this will no longer affect their eligibility to receive aid.
- Several website enhancements were made to improve the user experience.
5 Things You Need to Know When Completing the 2022-2023 FAFSA
1. Have your 2020 tax return handy.
- The 2022-2023 FAFSA application relies on information from 2020 tax returns.
- If your income or employment was affected by the Covid-19 Pandemic in 2020, you may be eligible for more financial aid than years prior.
- If this is not your first FAFSA filing, you may be required to provide verifying documentation about job loss. In addition, if you or the student’s income in 2021 and beyond is or will be greater than in 2020, it is likely future financial aid will be less.
2. Research the estimated cost of attendance at prospective schools before adding them to your FAFSA.
- Being prepared for the maximum expected contribution can help make an informed decision when selecting prospective schools.
- Colleges are now required to disclose all cost of attendance elements on the institution’s website, wherever the college lists tuition and fees. Many have their own Expected Family Contribution (EFC) calculators.
3. Submit your FAFSA as soon as possible!
- Many schools hand out financial aid on a first-come basis.
- Gather necessary documents/information so you’re ready on October 1st.
4. Everyone should fill out the FAFSA form.
- Regardless of your family’s income status, many schools are beginning to require a FAFSA on file for merit-based scholarships.
5. You must complete a new FAFSA every year.
- It’s not a one-and-done application!
- Keep in mind that as your financial situation changes, so could the federal student aid offered.
Contact your Marshall Financial wealth advisor if you have more questions relating to filing your FAFSA or funding your child’s education.