NEW FAFSA CHANGES ARE COMING FOR THE SCHOOL YEAR 2023-2024

NEW FAFSA CHANGES ARE COMING FOR THE SCHOOL YEAR 2023-2024

FAFSA양식 단순화 및 학자금 산정 기준 변경

(Source: The Association of Certified College Funding, Nerdwallet)

The new FAFSA is expected to have a shorter application and an easier path to eligibility. The FAFSA Simplification Act was bundled into the Consolidated Appropriations Act of 2021, which included the second coronavirus relief bill. The changes to the FAFSA are effective as of July 1, 2023, for the 2023-2024 academic year and afterward.

Here’s a summary of these FAFSA changes:

대학생 자녀들의 재정보조 혜택을 보다 쉽게 예측할 수 있도록 돕기 위해, 2020년말에 통과된 추가경기 부양법안에 포함된 FAFSA개정안이 2022년 10월 부터 시행하게 된다. 이로 인해 작성 양식이 대폭 간소화되고 변경되어, 이로 인해 대학을 입학하는 학생들과 학비를 부담하는 학부모들이 받게 되는 영향을 살펴 보고자 한다.

FAFSA SIMPLIFICATION(양식의 간소화) 현재 106개 문항이 36개로 줄어들게 된다.

The biggest change is the simplification of the FAFSA application form. The current 2021-2022 FAFSA form has 106 questions. Under the new laws, the FAFSA will be reduced to 36 questions.

The Department of Education intends to simplify the financial aid application by correlating it with the IRS’s income tax regulations. The FAFSA income questions will be transferred directly from the family’s tax returns to make it easier to complete the FAFSA. Many families already use the federal Data Retrieval Tool (DRT) when they file the current online FAFSA.

Student Aid Index replaces the EFC(가정분담금 용어의 변경) 가정분담금(EFC) 대신 학생보조지수(SAI) 로 변경하여, EFC가 학비를 부담하는 금액인지 보조받는 금액인지 분명하지 않았던 것을 재정보조를 받을 수 있는 금액여부를 알 수 있는 SAI로 바뀌게 된다.

The new FAFSA rules will also eliminate the phrase Expected Family Contribution (EFC) from the financial aid application. The EFC determines how much money a family can expect to pay for one year of college. The new law will replace the EFC with a new term – Student Aid Index (SAI).

The Student Aid Index (SAI) will become an "eligibility index" for distributing financial aid, not the dollar amount a family can pay for college expenses (EFC).

Pell Grant award will get easier(펠그랜트 자격요건 간소화 ) 자격조건에 해당하는 학생들은 모두 혜택을 받을 수 있도록 한다. 이로 인해 저소득층에서는 더 많은 학생들이 혜택을 받을 수 있다.

Pell Grant eligibility will be simplified. Maximum annual grants, for example, will go to students — or, if dependent, their parent or parents — who fall below the income thresholds for tax filing. Maximum grants will also go to those with adjusted gross incomes below 225% (single) or 175% (married) of the poverty line.

The act also extends Pell Grant eligibility for students who previously received a Pell Grant if they were unable to complete their studies due to the closing of their school or if their loans were discharged under borrower defense to repayment. It also restores Pell Grant eligibility to incarcerated students.

Applicants may get more need-based aid(SAI 가 마이너스 가능) 저 소득층의 경우, SAI가 마이너스 천오백불까지 내려갈 수 있어 보조금 혜택 금액이 늘어날 수도 있다.

Applicants will see their Student Aid Index set to zero automatically if they’re eligible for the maximum federal Pell Grant. The new formula would also allow an SAI of less than zero (negative $1,500). Both changes will allow applicants to receive more need-based aid.

MULTIPLE CHILDREN IN COLLEGE(다 자녀 할인혜택 중단) 자녀 여러명이 동시에 대학에 진학할 경우, 학비 부담이 많이 줄어 들었으나, 이 혜택은 사라지게 된다.

The new SAI formula will no longer give households with multiple children in college a significant break on their financial aid eligibility. Currently, parents who have more than one child in college at the same time have their EFC cut by almost 50% for each child. The new formula eliminates this calculation.

INCOME PROTECTION ALLOWANCE(소득 면제점 기준 변경) 부모와 학생의 면제점 기준이 늘어나게 된다.

The SAI formula also removes the state and other tax income exclusion and increases the parental income protection allowance (IPA). The IPA now includes only the number of members in the family household. However, it will increase by about 20%. The student income protection allowance, which is $6,970 in 2021-2022, will be about 30% higher in 2023-2024. This change reduces the SAI significantly for dependent students.

ASSETS(자산 보고 기준) 소득 6만불 이하인 경우 자산 보고의무 없지만, 이상인 경우는 그동안 제외되었던 Small business assets도 보고하여야 한다.

The income threshold for determining whether an applicant is exempt from reporting assets (the simplified financial aid formula) will increase $10,000 from $49,999 to $59,999. The SAI formula also eliminates the family farm and small business asset exclusions. This new ruling means that families would have to report the net value of any business or farm they own if they did not qualify for the $59,999 simplified formula that excludes assets from consideration.

DIVORCED AND SEPARATED FAMILIES(편 부모가정 작성 기준 변경) 현재는 함께 거주하면서 양육하는 부모가 FAFSA를 신청했으나, 향후에는 세금보고시 Dependent 로 보고하는 부모(경제적 능력이 많은)  소득을 보고한다.

Currently, the divorced/separated parent that the student lives with more than 50% of the school year is the parent that files the FAFSA application form. If the FAFSA is filed on Oct. 1, 2022, for the 2023-2024 school year, you’d look back and see who the child lived with in the year 2021. A typical financial aid strategy would be for the student to live with the parent who makes the least amount of income during 2021. However, under the new FAFSA rules, the parent who claims the child on the tax return (provides the most financial support to the child) will complete the FAFSA.

Also, child support received would be moved from untaxed income and added to parental assets.

GRANDPARENT GIVING(할아버지/할머니로 부터 지원받는 금액) 현재 비과세 소득으로 보고하여야 하는 금액을 더 이상 소득으로 보고하지 않아도 된다.

The FAFSA overhaul will make it easy for grandparents or others outside of the immediate family to pay for college costs without jeopardizing the family’s financial aid. This FAFSA change will ignore whether grandparents or others have given money to a child to pay for college costs. The FAFSA will no longer ask this question.

When grandparents, aunts and uncles, friends, or others outside the immediate family help with college costs, the money is currently treated as the child’s untaxed income, which is assessed at up to 50% by the EFC formula. In other words, distributions from a grandparent-owned 529 will no longer count as income for the child (current FAFSA question 44i).

More factors added to cost of attendance(교육비용 산정 요소 변경) 기숙사를 이용하지 않는 학생도 렌트비를 계산하고 식사비용도 하루 세끼로 계산한다.

The amount of financial aid you're eligible for is calculated by subtracting your Expected Family Contribution (soon to be Student Aid Index) from the school’s cost of attendance. 

The FAFSA simplification effort adjusts cost of attendance to include more factors and rules:

·        Colleges can no longer set the housing allowance to zero for students living at home with their parents.

·        Meal plans must assume students are receiving three meals a day.

결론적으로 저소득층의 경우는 작성 양식이 간단하고 자산보고 의무가 제외되므로 혜택의 범위가 커질 가능성이 높지만, 다자녀 혜택이 없어짐으로써 동시에 여러 자녀가 대학에 진학할 경우의 부담이 더 커지게 되고 특히 중산층 이상에서는 그동안 제외되었던 Small business assets을 포함하여야 하므로 학비 부담금액이 더 커질 수도 있다. 따라서 사전에 전문가와의 상담을 통해 Asset positioning과 혜택을 받을 수 있는 학교 선택에 대한 준비를 하여야 학비 부담을 줄일 수 있다.