Some key takeaways:
The formula no longer takes into account additional students in college when calculating SAI. “Schools may use professional judgment to adjust other data items related to COA or SAI that reflect costs associated with additional family members enrolled in college.”. This will require that the family request a PJ review, and it does not allow the school to adjust the SAI itself (in the past, the parent portion of the EFC was divided by the number in college). I honestly don’t know what schools would adjust or how it might affect the SAI.
Family size will be based on dependents reported on parent tax return. Applicants may update family size if it changes after filing the tax return.
Parent 529 account balances will only be reported if they are designated for the student (sibling accounts won’t be reported on a FAFSA other than their own).
There will no longer be an option for an independent student to provide parent information. This will impact some professional programs that have required it to award their own aid (they’ll probably have their own form or possibly require Profile).
The value of business with fewer than 100 employees will now be reported.
The value of a family farm will now be reported. There was legislation introduced to try to change this, but apparently it didn’t pass.
Certain types of untaxed income will no longer factor into the SAI, including housing, food, and living allowances paid to members of the military and clergy; veterans noneducation benefits; and the general categories of “other untaxed income” and “money received by or paid on behalf of the student.”
Cooperative education employment earnings, child support paid, combat pay, and the state and other tax allowance are no longer treated as allowances against income in the SAI formula and will no longer be reported on the FAFSA. This may negatively impact co-op students. FWS earnings will still offset total earnings, but they won’t be reported on FAFSA … schools have to make the adjustments using their records. Students who earned FWS and later transferred schools may want to talk to their financial aid office about an adjustment based on providing their records from their previous school (this would require a special circumstances request).
The Simplified Needs Test (SNT) and Auto-Zero were eliminated. Some applicants will still qualify for an automatic Maximum Pell Grant or be exempt from asset reporting based on similar criteria. The Dear Colleague letter details who will have assets ignored, how income affects the SAI and Pell grant, how negative SAI works, etc.
Pell grants are no longer prorated for less than full time enrollment in the manner they used to be. Instead, the Pell grant amount for the semester based on full time enrollment will be multiplied by the number of credits divided by 12. This may result in a higher or lower semester total than what the student would have had using the previous formula.
There may be other changes that stick out for those of you reading this.