MEFA Institute: FAFSA Simplification Overview & Updates

If you’ve been overwhelmed by all the FAFSA Simplification information that has trickled out and want an overview of the details you need to know, or you haven’t had the time to learn all the new updates, we’re here to help with our FAFSA Simplification overview webinar for college administrators. We discuss new terms, the updated formula, Pell calculations, the concept of contributors and the FSA ID, foreseen challenges, and best practices.

Download a copy of the webinar slides to follow along.


 All right. We're going to get started. It's 1230, but I'll, I'll try to speak slowly to allow everyone else to join. My name is Julie Shields-Rutyna and I'm the director of college planning, education, and training at MEFA. And we welcome you to this MEFA Institute webinar on our favorite topic. Is it our favorite topic? FAFSA Simplification Overview and Updates.

So let me give tell you that we're so lucky today to have Shawn Morrissey, who is MEFA's director of college relations give this presentation today. And also we're joined by Stephanie Wells also director of college relations, who is going to be behind the scenes with And I know Stephanie and I have had this conversation and been telling Shawn that Shawn has really been, you know, every day on the pulse of all of the information that is coming out about this topic and really doing a great job of synthesizing it, looking at the information from so many different sources and talking with many of you about what you're hearing and really putting it into let me say an easily digestible format, but you know, it's all relative.

So anyway, there's a great presentation that, that Shawn has on all of this information for you today. And, but we have to know that we continue to learn new things every day.

So here's where we are today and we continue to stay on top of this and we'll continue to work with you for the rest of the year to make sure that that we all have a good understanding. We have confidence operating in this new world and when the FAFSA comes out and all of that. So with that let me just give you a few other logistics.

Someone already asked this question. Yes, once you've registered for the webinar, we will send you a recording of the webinar and all of the slides tomorrow. So you will have access to all of this information so you don't have to be taking too many notes. And if you have to leave, because we know what your days are like, also know that you will get a transcript of the webinar of the whole recording, so that will come to you.

Something else to know on this slide is if if you have questions, put them in the Q&A, and that's what Stephanie and I can be doing behind the scenes. I'm in at the end, we'll take a little time and answer some of those questions.

If you would like to have a live transcript of the recording, press the CC closed captioning button, and you'll be able to see the words that we're speaking across the screen. And you can even choose the language that you want to see those words in. And lastly, I guess I'll just say a few words about MEFA.

I'm going to assume that at this point you know that MEFA has been around for a long time and is, is always here to help families plan, save and pay for college and help families. All of you to to do the same with families. So with that, Shawn, I know you have a lot to talk about. I'm going to turn it over to you.

Thank you, Julie. So what we're going to be going over today are we're going to be reviewing the basics of FAFSA Simplification, talking about the new terms, changes to the questions and provisions, formula changes, contributors, FSA ID process, and the steps for independent and dependent students, the new Pell Grant calculation, and some great resources that are out there.

Throughout, we'll be trying to share all of the latest information that we know about all of this process. As you're all aware, things are coming out daily almost, with new changes, so some things still may change before the FAFSA debuts, but this is all the information that we know at this point.

So first of all, we're going to go over some new terms. So there are a lot of new terms that were introduced as part of FAFSA Simplification. So I thought we could go over those first just so that when we're going through all of the topics, we'll have these new terms. In the back of our mind. So the first thing is the Student Aid Index or SAI.

This is replacing the EFC and it's going to be a whole new calculation. We'll be going over what that formula is and the reason for changing this is because they wanted this to be a more accurate reflection of what this, this calculation actually is where it's an index number used to calculate the family's financial strength to pay for college in one year, rather than the Expected Family Contribution, which just really confused families and made them think that that was the amount that they have to pay for college.

So this should be a good change where it will be easier to explain to families what this actually means. You don't have to go through that whole explanation of that's not what you're paying for college. It's just an index number. So they, that, that'll be reflected. Now the Student Aid Report is now going to be called the FSS or FAFSA Submission Summary.

So most of the information that was always there in the Student Aid Report will now be in this FAFSA Submission Summary. But there's going to be a little bit of a different look to that as well. And we'll talk a little bit later about the information that's coming over from the IRS. That's not going to appear for them in their FAFSA Submission Summary, but we'll talk about that in just a minute.

And there is now a new way for information to come over through the FAFSA. So when the student is going into the FAFSA and has to pull their information from the IRS instead of using the Data Retrieval Tool where they had to go in and actually pull the data into there. Now they will just provide consent and use what's called the FA-DDX.

Some people are calling it FA-DDX. But that's the Future Act Direct Data Exchange Tool, and that's replacing the DRT, and it's a much easier tool where once you provide consent, it automatically pulls that information in, and more people should be able to use FA-DDX than have access to the Data Retrieval Tool, and we'll talk a little bit more about that as we go further.

And there's a new term for anyone that has to submit information on the FAFSA, so that would be the student and parents that have to put their information on the FAFSA. We'll be talking about who these people are, but they're called contributors now. So that is a new term for family members that have to put their information on the FAFSA.

There's also a new way for students who used to have to go through and do an independent override process. Now there's a whole process that they can say that they are provisional independent student and get the provisional independent student status on the FAFSA. We'll be talking about what that process looks like, but this is a great process where the FAFSA will actually process for these students.

So in the past without the financial aid officer signing off in an independent override, the FAFSA would reject. Now the student is able to say, I think I meet these criteria for provisional independent status and then the FAFSA will process and then afterwards the financial aid officer will have to verify that information.

But we'll look at that a little bit more closely in just a minute. And estimated financial aid is now called other financial aid in the formula. So that is just a change of terminology. I talked a little bit about consent being something that has to be given in order to use the Future Act Direct Data Exchange, and we'll be talking a lot about as we go through this whole presentation.

But in order for the FAFSA to be processed and for students to be eligible for federal aid, all contributors do need consent to the process and we'll talk a lot about that as we go through. Family size is the new term that's replacing household size and this is pulled directly from tax data through the FA-DDX, but this can be manually corrected and we'll talk about that process as well.

Federal tax information is now called FTI and this is important because all of the information that is pulled from the FA-DDX is going to come into your systems flagged as FTI or federal tax information and there are new rules on to how to handle that and to keep that information secure and we'll be talking a little bit more about that as we go through and because all of this information has to be secured.

There is now going to be a new student aid internet gateway SAIG mailbox for FTI, the FTI SAIG mailbox. You have to make sure that that gets set up in time for you to start receiving that data. Hopefully in early January, once the FAFSA becomes available sometime in December or maybe later December, if It comes out surprisingly earlier in December.

The FAFSA Processing System is the new term for CPS, which was the Central Processing System. So they're just trying to make this terminology a little clearer as to what's actually happening behind the scenes. And now FAA access to CPS is called the FAFSA Partner Portal, or FPP. And now there are two new terms when it comes to special circumstances or unusual circumstances, special circumstances are what are going to be the circumstances that a family tells you about if you are going to be doing professional judgment.

So, job loss any change in income that a family may do. May occur in their family circumstances. Those become special circumstances now and unusual circumstances are now conditions that justify a student's change in dependency status. So if they are using that provisional status, provisional independent student status that is now called unusual circumstances rather than special circumstances.

So there are a few changes to FAFSA questions. So income questions are eliminated from the online form, meaning they don't have to be manually entered anymore. The income questions are all be coming from the IRS data through the FA-DDX except for a couple of questions, which would be foreign income.

And there's also a new question added in there for any type of rollover question. So there they've added that question in now because it is pulling all of that information right from the tax return. If you do have a rollover, you can now say that in there so that the rollover is not included in the calculation.

There are no asset questions for more applicants. So now if family's income is less than 60,000, they don't have to put in asset questions. If income is over 60,000, then assets will be reported for applicants. The number in college question is still on the FAFSA, but it's no longer in the methodology, so it's no longer an automatic that if you have more than one student in college, that the calculation is not automatically going to divide by the number of students in there.

So the number in college is now no longer included at all in the methodology, but the question is still asked on the form. So that if it's still there and available, but it's not being used in the calculation of federal aid. Cash support and other money paid on a student's behalf that question has been removed.

So students no longer have to report that support that they're receiving from other sources on the FAFSA. Another big change is the housing choice question has been removed. So you'll no longer be able to see if a student is planning on living on campus, off campus or with parents on the FAFSA. So schools do have to find another way to collect that information.

I've heard a lot of different ways that schools are doing this. Some are getting that information from an admissions application. Some are receiving that on a different financial aid application. Some are starting a whole new process just to collect this information. So it, it is difficult because you do need that information in order to calculate what the COA is for families, but that's no longer on the FAFSA.

And what we've been hearing from FSA so far is that they don't think that this is something that they're going to be able to add, but they are still looking into that for future years. And the reason they don't think that they can add that question It's because there are the statute that created FAFSA Simplification only allows certain questions to be asked on the FAFSA in order to keep the process simple for families.

And that is not one of the data items that they're allowed to ask. And the option to answer parent questions for independent students has been removed for so far, especially for graduate students or independent students. You used to be able to voluntarily enter parental information on a FAFSA if you needed to collect that for other reasons.

Now that's not available for independent students. So if you need to get parental data for independent students. There has to be another doubt mechanism in order to collect that information. I know particularly for medical schools and professional schools where they're, they are trying to get information for HRSA, that can be difficult because they do need parental data for independent students.

And there are also new questions asked about a student's race and gender. Those questions do need to be answered, but the student can say they don't care to answer that question, but they do have to go in and check the box. It says they don't want to answer that question. The questions for race and gender are not shared with the school or shared with other contributors, but they do have to answer those questions and those are going to be used just by FSA for research purposes.

The determination of the parent in cases of divorce and separation has changed, so it's no longer going to be the custodial parent that Is going to be the parent of record in cases of divorce or separation.

Now it's going to be whichever parent has provided more than 50 percent of the support in the last year. If neither parent provided more than 50 percent in the last year, it's whichever parent provided more than 50 percent of the support in the last year that support was provided to the students. If it's 50/50 between both parents, then it's whichever parent has the larger income or assets.

The advice that I've been hearing from FSA is they don't think that there is any real world scenario in which both parents provide exactly 50 percent of the support that if. One parent even so much as provides an extra cup of coffee to the student that that would put them over the edge as to who is providing more than 50 percent of the support.

And this is the family's determination to make unless there is conflicting information. A school does not have to police this and find out who. Who should be providing their information on that only if you have any conflicting information in your office do you have to follow up on that. And we'll be talking a little bit more about that whole process in just a minute as well.

The family size is now based on the dependents claimed on the tax returns. So that's going to pull directly from the FA-DDX into the FAFSA and from your the tax return information families are then given the information to change that if they'd like to Or they know that that information is incorrect The downside is that this is not going to be displayed to the family.

They're going to just have to know that it's different from the information that's reported on the tax return and then they would go in and manually override that and now for students, only federal work-study earnings are excluded from income. In the past, there were other types of earnings that could be excluded from their income.

Now it's only federal work-study that's being able to be excluded from their income. Child support received is now reported as an asset rather than income for the parent that is receiving the child support that is now reported as an asset. And there has been a little bit of conflicting information about if sibling 529s will be reported as parent assets or not, or if only the 529 plan for the student who is filling out the FAFSA has to be reported.

And we're watching this very closely and we'll give more information about this as we do, as we can. One of the big things is now if a student is separated from their spouse and previously would have been considered independent based on being married, once they are separated, they're no longer considered independent if that is the only thing that would have made them independent.

So being separated makes them no longer considered independent and they would have to provide, um, parental information. There are also no more alternative months for the SAI like there were for EFC. So now there is one SAI calculation and that is used regardless of the number of months that the student is in school.

So if the student is only doing one semester worth of work or doing a Period there, they would still use the full year SAI and not use alternative month EFCs for that. And now estimated financial aid is now excluding emergency aid. So you do not have to put into the calculation any emergency aid that a student may receive when you are determining their need for other financial aid.

You don't have to include emergency aid any longer in that calculation in the EFA. And now small businesses and family farm values must be reported for all families that have to report assets. So in the past there was a threshold that if the business was under 100 employees that that did not have to be listed on the FAFSA.

Now that small business or farm value must be reported for all families if you do need to report assets. Some formula changes. I mentioned quickly before that the SAI is no longer split for the number in college. Number in college does not come into the calculation at all anymore. And now the SAI can be as low as negative 1500.

So they do allow the SAI to go into negative digits. When you are doing the calculation of COA minus SAI minus estimated financial aid to come up with your need, that SAI is used as zero even if you have a negative 1, 500. So you don't, students do not get an extra 1, 500 worth of aid in the formula.

But this is used in order to really identify students that have the most need. So the students that would have the most need could have a negative 1, 500 SAI. And the SAI still does determine eligibility for all Title IV aid in the formula. However, and I'll be going over this at the end of the presentation, there are other ways to be eligible for Pell Grant, rather than just being determined by SAI.

So there are roads to get maximum and minimum Pell Grant awards that. Are not tied directly to SAI. So that's different than how the EFC was treated and we'll talk about that in just a minute. The income protection allowance has increased. So this will help families possibly be eligible for additional federal financial aid.

So in the formula that has increased and that's based on the number of people in the household. There are different figures for the income protection allowance based on the number of people in the family. They have taken the state and other tax allowances out of the formula, so you're no longer looking at that.

And now when the SAI is being determined. The dependent student available income is now allowed to be negative. In the past, if a student, if the whole, the way the whole formula worked, if the student's available income was a negative number that used to just automatically be zero in the formula.

Now it's allowed to be negative and that can sometimes count for a lower SAI than they would have received in an EFC. So that's a positive change for families as well. Okay, so I brought up quickly the concept of contributors when we're going through the terms and this is going to be the new term used for parent and possibly parent spouses, student spouses on there when they have to put information onto the FAFSA.

And because the name contributor makes it sound like you have to contribute towards something, all that they are contributing is their information on there. That doesn't mean that they have to contribute financially to the student's college costs. And there are several places within the FAFSA that they do state that very clearly that the contributors only have to complete their information and will be not asked to become financially responsible for your education.

So this is a positive change that they've actually put that in writing so that when you may have parents that are reluctant to put their information on the FAFSA because they think that makes them become financially responsible for the education as well. There are several places in the FAFSA process that that is outlined very clearly for families.

And they, you see here, this is a screenshot of what the FAFSA will look like. And there are a lot of great information, help information for families as they start the process. This is one of the first landing pages on here and it tells them exactly what they might need in order to complete the FAFSA.

So one of the Big changes is who needs an FSA ID towards filling out the FAFSA. So now there is the new concept of having to provide consent to the IRS to pull the information into the FAFSA and everyone. Who needs to have their information pulled in will need an FSA ID in order to provide that consent.

So uh, we have a little chart here that's going to help explain who actually needs the FSA ID. But once the FAFSA becomes live sometime in December, there will be a parent wizard in there that will help families through this whole process that the families can go through this whole process and then we'll ask a series of questions, very similar to how we have this outlined here and once they answer those questions, it will tell them who needs to be a contributor on there and also who needs their FSA ID.

So for dependent students whose biological or adoptive parents are married, or if they're not married, but living in the same household, then if both parents file their taxes jointly, only one parent needs an FSA ID. So the concept here is when you're pulling in information from the IRS, it's whoever has ownership of that data needs to give the consent in when a family files a joint tax return.

Then both people who are on that joint tax return have equal ownership of that data. And so only one of them will need an FSA id in order to pull the information for both of them if they filed a joint tax return. However If those parents filed their taxes separately, then the ownership is separate depending on those each parent filing separately. So then both parents would need an FSA ID.

If the parents didn't file tax returns, again, both parents will need the FSA ID because the process has to give consent. in order for the IRS to determine that those parents did not file taxes. So both parents would need an FSA ID. And then if one parent filed taxes and one didn't, both parents would need an FSA ID in that case as well.

Now it becomes a little bit more complicated if the biological or adoptive parents are divorced or separated, then you have to determine again which parent provided more financial support in the last year. So if one parent provided more financial support in the last year, that parent becomes the parent of record for the student.

If that parent is not remarried, then only that parent that provided more than 50 percent of the support will need an FSA ID. Again, no data will be needed from the other parent who gave less than 50 percent of the support. If the, the parent that provided more than 50 percent of the support is remarried, and that parent filed a joint tax return with their spouse, then only one parent would need the FSA ID in that case.

If that parent that provided more than 50 percent of the support is remarried and they filed separately, both the parent and the step parent would need an FSA ID in that case. And if that parent and they did not file tax returns again. Both the parent and the step parent would need an FSA ID.

If both parents provided equals support then it's whichever parent has the greater income or assets is the parent of record. And then those same rules would apply there. Then whichever one of those parents um, has the greater income or asset. If they're not remarried, only one FSA ID. If they are remarried depends if they, if they filed jointly or separately.

Jointly, only one would need that. Separately, both would need that. And then if neither parent provided financial support in the past year, again, you have to go back and see whichever parent provided the more financial support in the most recent year that the support was provided, and then it goes through the same process, determining who needs the FSA ID in order to provide consent on the FAFSA.

And then if a, for a student who is independent, if they're not married, only the student will need an FSA ID. If they're married and filing jointly, then only the student needs the FSA ID. And if they are married filing separately, they both need the FSA ID. And if either did not file taxes, they both need an FSA ID.

And in all cases, I'm sorry, I didn't say this. The very beginning, the student will always need an FSA ID. The student is required to have the FSA ID and they cannot start the FAFSA now without having an FSA ID. So in the past, they used to be able to go in and start the FAFSA and they would only need the FSA ID at the end to sign the FAFSA.

Now in order to even start the process the student does need an FSA ID. And there is a new process out there to receive an FSA ID for a person who does not have a Social Security number. In the past, you needed a Social Security number in order to sign up for an FSA ID. Now there's a whole new process for those without a Social Security number.

And there is it's kind of a two-step process, but if the person is able to get through the first step of that, they don't need to go to the second step. And the first step is a knowledge-based identity verification process, which is linked to Trans Union to verify their identity in order to complete their FSA ID.

Julie, is there a question before I go further? Julie, you're on mute. Sorry, there is. But I don't want to interrupt this slide, but I'll ask a question before you move too much further on that someone asked. Okay, great. Thank you. So, the knowledge-based questions from TransUnion are very similar. I don't know if you've ever had to do identity verification through TransUnion.

They may be looking at information about where you've lived in the past few years. If you've taken a loan out on something in the past few years, it asks you some multiple choice questions in order to try to determine Your identity based on answering those questions properly based on information that is in your, your Trans Union file.

And if you answer all of these questions correctly, the identity verification is immediate and your FSA ID is ready to use. If the questions are not answered correctly, then there's a secondary identification process that well go over in the next slide, and this whole process is going to debut for non SSN holders at the same time the FAFSA debuts for those with Social Security numbers, they can set up an FSA ID now, and it's probably advantageous to advise families to get their FSA ID as soon as possible, because it does sometimes take three days for that process to go through for SSN holders.

It does do a match with the Social Security number Social Security Administration. And for that to come back and be available for families to use to pull their information from the IRS. That can take up to three days. So the earlier they can get that process going, the better.

And that process is available for Social Security number holders right now. For non Social Security numbers, that process will debut when the FAFSA debuts. And the secondary process, if they are not able to answer the Trans Union questions correctly, then they do have to call the FSA um, I see at that number and then the customer service representative will set up a ticket for them saying that they are have to do the secondary process.

There's also an attestation form that will become available on that the families will have to fill out and then they will have to email in proof of identity, which is either going to be a driver's license state or city ID card or foreign passport, or if they're not able to provide one of those three things, then they have to provide a utility bill.

And one of the following, a municipal ID card, a community ID, or a council counselor ID card. So the process does become a little bit more difficult for non-SSN holders if they aren't able to answer those questions correctly.

Julie, what was your question? Yeah, and we have two of two similar questions. And we get this question a lot. So I thought it would be best to have you answer it out loud. So this is one of those timing questions. And I think I'm catching correctly what both people are asking. So let's say parents were married in 2022 and filed jointly, but now they're divorced.

And let's just make it the most complex and they're both married to other people. Can you talk through how how that will work for them? So what will happen is if the parent's marital status has changed since they filed taxes, so they're, they're now filing with different, either a different spouse or filing singly, what will happen is they can then, they still have to use the whole process provide consent.

What will happen is a flag will come up that the information doesn't match the contributors information that's in there now because it's either just going to be one parent, or it's going to be that parent and a new spouse, and then they have to enter their information manually on there so that is one of the few cases where they're actually entering their tax information manually on the FAFSA.

Otherwise, otherwise. They won't even be presented with the manual option to put their tax return information in, but in this case they will be presented with the questions to manually enter all of their tax information. Thank you, Shawn.

So we talked quickly about the provisional independent student process and this is what it looks like for a student. And it's actually, I think, a pretty good process for the student because it does list here all the different circumstances that a student may be considered for this provisional independent student.

So, for example, it says left home due to an abusive threatening environment, been abandoned by or estranged from parents, or have and have not been adoptive, been granted a refugee or asylum status and separated from their parents, been a victim of human trafficking, been incarcerated, been otherwise unable to contact or locate parents and have not been adopted.

So in those circumstances, a student can say yes to these. It will process the FAFSA without parental data being needed to be provided in this. And then the school will follow up and verify that the student meets the criteria to be independent. And one of the other improvements to this process is once a school verifies this in the first year that will follow the student through and they will be considered a provisional independent student going forward, and will not have to give their parental information.

Also, if one school does verify this, a second school can use that school's determination when they are verifying that for themselves. So the fact that another school verified that you can use that as your verification for the student meeting the independent status as well on that. And if a student does not meet those circumstances and for whatever reason, the parents do not want to provide their information on the FAFSA.

The student can say that they want to fill out the FAFSA without the parental information in only be eligible for the Unsubsidized Stafford Loan. If they want to do that, they check yes to this box, and then they don't need to provide parental information. Otherwise, students will have to provide parental information on the form if they are considered a dependent student.

So how the student does send information to the parents to ask them to fill out their part of the FAFSA because it's now separate sections. So the student will go through with their FSA ID, do all their part, go through that whole parent wizard to determine who should be the parent and determine if they are a dependent or independent student to see if they do need parental information at all.

And then they go through and are presented with this information to invite the parents on to the FAFSA form if they are considered dependent and do have to have parental information on there. So they do need the parent's name, date of birth, email address. and Social Security number if the parent does have a Social Security number.

If the parent doesn't have a Social Security number, there is a box to check there. And then they do not have to provide the Social Security number. The email address that's provided here does not have to match the email address that's on the FSA ID for the parents. But this will be the email address that the information is sent to.

When that that information is sent to the parent and again, the Social Security number as far as far as we know right now is required for the parent to be sent the invitation unless the parent does not have a Social Security number. And then once the parent is sent this information, they receive this email and it will bring them into the FAFSA site to fill out the FAFSA.

The good thing is, it will bring them directly to the FAFSA site if they already have an FSA ID. If they don't have an FSA ID, that's going to bring them first to set up an FSA ID to the FSA ID site. So it is a little bit easier than for the parents because they do need to have that FSA ID before they can start the process.

And again, it's right in that email that is sent to the parents that the parent is not financially responsible by being a contributor on the FAFSA, it just makes them eligible for financial aid, and it outlines what that could be.

And once the parents receive that, if they do have an FSA ID, it does bring them to this landing page and they will see the information about the student and other information if they already have loans out already. It may show information there for that as well, but it will have a landing page to show that they've been asked to be a contributor.

And they can then click the Get Started button to start filling out their information. And again it goes through and outlines what being a contributor means and outlines that they do not have to provide financial support to the student for their education, but they do need to provide their information in order for the student to be eligible for financial aid.

And they do have to provide their consent in order for the tax information to come over through the FA-DDX. If they do not provide consent then the student is not going to be eligible for financial aid. If they do not provide consent, they are going to be brought to a part to manually enter their information.

But if they manually enter their information without providing consent, the student will not be eligible for financial aid. So even though they enter all that information manually they do need to provide consent to use the FA-DDX in order for the student to qualify for financial aid. And there are some frequently asked questions during the consent process that talks about what will happen if they don't provide consent, and there will also be a box that pops up before those questions come up to manually enter the information, telling them that if they don't consent, the student will not be eligible for federal student aid.

So that will pop up for them, but they will then be presented with the manual questions, but even if they answer those, the student is not eligible for federal aid without consent. They can go back in and provide consent later if they change their mind. So if they go through the process, realize that they entered all their information manually, and then later in the process they realize that they're not eligible for federal aid, or they talk to the financial aid office, there is, they can go in and make a correction to the FAFSA to provide consent at that point.

So that can be remedied if they do go back in and provide consent at a later time. And I talked about this a little earlier that the family size is going to pull from the individuals claimed on the 2022 tax return, um, but the family's information is not displayed to them on the form when it pulls in.

None of the information that's pulling from the FA-DDX from the taxes is going to display for the families. So that information is just going right into a repository, all of the federal tax information, and then it's going to be held there and sent to the schools in that separate mailbox that has all of the FTI, the federal tax information in it.

It's never going to be displayed to the family, so they won't be able to see any of the information that's pulling from the IRS. And especially for this, they have the opportunity here to correct the information, but again, they won't be able to see what that is originally. But this will help for families that may be in a divorce situation where the person who claims the student changes from year to year.

And so they may need to update that information if there is a new member of the family that is born into the family since 2022, they can update the information here as well. So it's going to make a little bit of an assumption based on the number of parents that are contributors on the FAFSA and including the student, and then it's going to ask them for any other children or dependents that they need to add to that, and that's how they will change their information. So they're not just putting in the total family size. It's already, in this case, in this example, the family size is already considered to be three.

And then if there are other children, they enter in that other additional child as well. So that makes their family size of four and students can now list up to 20 colleges rather than 10 on there, which is going to help out a lot of students and it also has a great new information in there that if the student chooses a state that has specific guidelines as to what the order of the schools has to be in order for that student to be eligible for state aid in that particular state, a box will pop up and saying, Oh, you've picked us a school that is in Connecticut. Connecticut is one of the states that needs a certain order, and it tells you what the rules are for that state in order to be eligible for state aid, and then you have the opportunity to reorder the schools that you've listed on there in order to meet that eligibility. There are only a few states that have that.

But this used to be a problem for students in some states, and they've added that in to try to help students make it easier to determine if they need to change the order of their schools on the FAFSA. And there's a whole new Pell Grant calculation now. There are now three ways in Pell Grant. So you can either receive an automatic maximum Pell Grant.

You can have a Pell grant based on the SAI, or you could be eligible for an automatic minimum Pell Grant. What does that mean? So, in order to qualify for an automatic maximum Pell Grant, if the parent was not required to file a federal tax return, or a single parent with an AGI less than zero and less than 225 percent of the poverty guidelines for the family size in the state where they live or if a parent is not a single parent and the AGI is greater than zero and less than 175 percent of the poverty guidelines for the family size in that state, then they qualify for an automatic maximum Pell Grant. Or if the student parent died serving in the armed forces after 9/11/01 or the line of duty as a public service, safety officer, then they are eligible for an automatic maximum Pell Grant.

So instead of having a separate federal grant as they have in the past, now they are just eligible for the automatic maximum Pell Grant if they do have a parent that died in the armed forces or in the line of duty as a public safety officer. So, if they meet any 1 of those criteria, then they're now automatically eligible for a maximum power, regardless of what their essay is.

They can. If they're not eligible for an automatic Maximum Pell Grant, they could be eligible for a Calculated Pell Grant based on their SAI. And how that works is the Maximum Pell Grant, less their SAI becomes their Calculated Pell Grant. So if the Maximum Pell Grant is 7,395, their SAI is 1,395, they would be eligible for a Calculated Pell Grant of 6, 000 in this case.

And the automatic minimum Pell Grant, if they don't qualify for either the maximum Pell Grant or the calculated Pell Grant, if they're a single parent with an AGI less than 325 percent of the poverty guideline for their family size, or parent who is not a single parent and their AGI is less than 275 percent of the poverty guidelines for that family size, then they would qualify for an automatic minimum Pell Grant.

And the automatic minimum Pell Grant is equal to 10 percent of the maximum Pell Grant. So if the maximum Pell Grant is 7,500, then the minimum Pell Grant would be 750. And there is a great decision tree here that NASFAA has that talks a little bit, actually talks a lot about how you can qualify for a Pell Grant because there are some other nuances on in there for independent students.

Their poverty guidelines are a little bit different for their maximum and minimum Pell Grant than the dependent student ones that I just went over. And this graphic is on the NASFAA website and we have links for all of this in the slides that we will be sharing with you. But this is a great graphic that goes through this in great detail as to how a family might qualify for a Pell Grant under those three different methods.

And Pell proration is a little bit different this year. So there's no longer the concept of three quarter time, half time, less than half time for a Pell Grant. Now it's just a straight proration of what the full time Pell Grant is. So this full-time Pell Grant is equal to 12 credits. So even if your full-time program is different than 12 credits, for the purposes of determining Pell, they're keeping that at 12 credits.

So for a student that is enrolled in seven credits you take the seven divided by 12, and the student is eligible for 58 percent of that Pell Grant. So now a student's Pell Grant changes based directly on the number of credits they're taking, not half time, three quarter time as it did in the past.

So there, there can be quite a bit of change for a Pell Grant based on the number of credits and half credits to count in that determination. as well. So if someone took seven and a half credits, it would be 7.5 over 12 when you are determining the percentage. The Pell cannot exceed 100 percent. So if a student is taking more than 12 credits, they don't receive additional Pell Grant dollars above those 12 credits.

So the most they can receive is 100 percent of the Pell Grant.

And all of the modeling that has been done nationwide shows that. Overall most students should see an increase in Pell and more families may qualify for PAL now. The negative impact to PAL is minimal, but there are some um, mostly independent students are completely unaffected, but dependent students could see a change based in the number in college change.

So if there are additional students in college, And they did qualify for Pell Grant in the past. In some cases they may not qualify any longer for that Pell if they have multiple children in school because that's no longer used in the calculation. Also because of the asset exclusion going up to 60, 000 now, More families may benefit from that, but with the small business in farm information being included for all small businesses and farms now some families who are in those situations may see a reduction in their Pell Grant, but in most cases, Pell Grant.

Most students are going to see no change in their Pell Grant amount or an increase. There are only a small portion of students that have seen a decrease in that, in any of the SAI modeling that's done, been done nationwide. So things that you might want to start thinking about now, or you may have already been thinking about, is informing key stakeholders and other offices about how this is going to affect their areas.

Certainly let your senior leadership know all these changes are taking place that you may need additional support to go through this, that award letters may be delayed based on this process, or you may have a different timing on that, so you may need additional staffing just for a short period of time to get through that crunch with all the information coming in all at once.

You want to let your finance office, your admissions office know about any delays that might happen to the awarding process specialty services offices might need to know this information. Institutional research, you might want to talk to them about how the FTI, the federal tax information, can be used now.

This can only be used in determining financial aid. There may be information where you... Used to be able to share tax information with your institutional research office to determine other research on campus. Now it can only be used for very specific purposes, so make sure you review that with institutional research if they were using that.

For information technology you want to check with your software provider. Also check with your chief information and security officer to let them know that. This new FTI information has to be handled in a secure manner. Make sure they have the servers set up properly in order to store that information and The FTI and the controlled unclassified information as defined by the law.

Now, there are very specific rules on how that information can be stored on campus. So make sure you share that with your information technology offices as well. We have a lot of helpful links here. NASFAA has a really great FAFSA Simplification web center and I did just learn this week and other people may have already done this, but the FAFSA simplification information on NASFAA, you do not have to be a NASFAA member in order to access that information.

Some information on NASFAA, you do have to be a member to access, but all of their FAFSA Simplification information they have put out there for free to, for anyone to access and the link is here for that. There is a student aid eligibility tool that families can use that it's, it's basically a calculator.

They can go in and enter information about their 2022 tax information and it will give them an estimated SAI and also tell them what they may be eligible for in federal aid. All that is available for families, even though the FAFSA isn't available yet for families to try to get some information on what their SAI might look like.

There's also the FAFSA prototype out there. The information about accessing that is right here. The caveat being that that prototype is not being updated in real time along with what they're doing for changes on the real FAFSA. So if they've made changes to the FAFSA since the prototype debuted earlier this year, I think it was in early October, late September, that will not have been updated to the prototype, but this just gives you a, a good look and feel to see what the different pages of the FAFSA looks like and what that flow will look like for families.

The federal student aid Training Center is linked here and the FAFSA Simplification Knowledge Center as well are linked here, which has some great guides on there. They have a lot of webinars available in the Knowledge Center that the recordings are available for there. And they also do have the transcripts of those and they have a lot of Q&A sessions there as well that they list all the information on.

MEFA also has a lot of great tools that you can look at for your own help. And also you can guide families through our resources as well about information about who needs an FSA ID, creating an FSA ID. We have a lot of great information that tries to get to this, all of this information very simply for families because as.

It is a much more complex system and there are a lot of changes for financial aid offices, but for families, in most cases, it's going to be an easier process for them. And we're trying to keep that information that we're sharing with families clear and Highlight that information that it is going to be an easier process for them in most cases and please connect with MEFA on social media.

There are links here and as Julie said earlier, we will be sending copies of these slides in the recording to you to go through and now do we have more questions, Julie? We do and we have we have great questions. And there's one I'm going to go back to you about something we already talked about.

But let's take a couple of these first. If a student indicates they are unaccompanied and homeless, but also indicates that none of the authorized entities verified that status, will they be processed as provisionally independent or independent? If they indicate that they, there's no entity to verify that, I think that they're going to be provisionally independent, but I'm not completely certain on that.

But either way, whether they are completely independent or it provisionally independent, the FAFSA will process in both of those cases. So you'll still get a valid FAFSA, but you will be guided whether you need to follow up and verify that information, or if it's just as a provisional independent student, you would have to follow up if they're just deemed independent because they answered yes to that, then you will be told that that that that process happened and you're not required then to follow up on that.

But you can choose to follow up if you wish to. Thank you. And then when parents don't give consent, but manually input information, does that come to the school as a rejected FAFSA or is there an associated comment code for ineligibility? My understanding is that that will then be a rejected FAFSA.

But there may also be a comment code associated with that as well. But again, if the parents don't give consent, then the student is ineligible to receive federal aid. All right. Now, I know we we've heard this on some of our other webinars before, too. What if both parents filed incorrectly as head of household, but they should have filed married filing jointly?

Will this be caught or rejected? So their information will both pull in there and then they You know, that is they filed their taxes incorrectly, but it's for financial aid purposes. It's going to pull their information in there. So you may have to go back and talk to them that they filed their taxes incorrectly if they both come on as head of household, but that it will still process the FA-DDX.

Okay, that's actually good news. Are students still required to be enrolled at least half time for federal loans? Yes, that hasn't changed. So now I'm going to go back just to some of, because there was a follow-up from those first questions we asked about people change, you know, being married, filing jointly in 2022 and then making a change between then and now, um, couple of people followed up.

And so one person was confused. I think I'm, I'm explaining this correctly that the actual marital status won't change. Because they're still married. They're just married to a different person. Maybe the person was concerned about that. Well, triggering something. Yeah. So what part of the process, and this is the way I understand it.

They haven't really showed the whole process, but the way the concept is I'm, I'm looking at it is when the contributors put in there, they have to give both Social Security numbers for both of the contributors. So if those Social Security numbers don't match the joint information on that It will not pull that information in and that's when they'll be triggered to manually put that in there. So if the new spouse is different has a different Social Security number than the old one, which they would and they have to enter that information, that should what should be what triggers them to manually put that information in there.

I haven't seen that debuted or, or, or shown in any of their things, but that that logically seems like what should happen in that process. But that's 1 of the things they really haven't previewed it all for us. That's great and then that same person also asked and does that mean only 1 parent is required to create an FSA ID?

So. Both parents would need an FSA ID for that. Let's see, they're manually entering the information. They would have to have both parents would need consent because they need to check to see if that other person is a tax filer or not. So it would have to still have to provide two FSA IDs, I believe in that case.

Even though they're filing jointly on their new tax return because they've 2022 tax return they were not filing jointly at that point So those two people did not file a joint tax return together. They would need an FSA ID for both of them Does that make sense? And then this question is, can you talk about how a parent could start the FAFSA and invite the student versus the Yeah, so this parent, there is a process for a parent to start the FAFSA rather than the student starting the FAFSA.

So the parent would go in provide their FSA ID and say they are starting the FAFSA. For the student and then they would provide all of the student information. They would then have to invite the student to fill out their section, just like the student had invited the parent to fill out the section.

And then the student goes back in and fills in their information as well and provides consent in order for the tax return. All the advice that we're hearing from FSA is that they think that the process is much smoother if the student starts the process because there is a little bit of duplication of information when the parents start the, the process, but there is a road for parents to start the process.

It might just be a little bit longer than if the student starts the process. And then this person asks if a contributor doesn't sign the FAFSA within 45 days after the student submitted it, will the student have to redo the FAFSA? And if yes, will the school see the first FAFSA? So the student, if the contributors do not enter their information within 45 days of the student inviting them, then the student does need to restart the FAFSA.

The schools are not sent anything until it's a completed FAFSA. So the school will not be able to see that the student started the FAFSA and that the contributors were invited but did not do that. The caveat to that is if any of the contributors goes in and fills out some information and makes a change to something, then the clock is restarted.

So there may be a case where a student could go in and make a change to a data item to restart that clock if they need to, but they haven't they haven't previewed that either, but that's what we're hearing that the student may be able to make some changes to restart that clock. But a data item does need to be changed in order for the clock to restart.

So here's one back to the two parents that filed head of household. That must be common because we, we just hear it so often. This is, I think a bigger financial aid question. Shawn do financial aid administrators not have to care what the filing status is just that we have their information. In other words, you know, you said it could be pulled in and it could be an incorrect way to file.

Does that matter? Should someone care about that sort of financial aid administrator care about that? It is conflicting information. So you do need to do something about that. And it's going to be so that the. Calculated tax may be wrong in that case. So you do need to follow up with families and see about them correcting that information.

The other good news is however, that if a family does have a corrected amended tax return, that the FA-DDX will pull in the amended tax return, where in the past, the IRS DRT did not pull in the amended tax return. Now the FA-DDX does. What we're not clear on yet is if a parent makes a change to their tax return after they provide consent.

If you'll get a corrected ISIR with new information on there with their updated tax information, but they, that has been asked and hopefully they, that would generate a new tax return because then a new new information to be sent to the school because then in that case where you did have to that filed head of household if they went in and corrected that you would then receive a corrected information on the ISIR with the new information with the new tax return once that was corrected.

Well, thank you. And Shawn, speaking of taxes, we have taxed you to a lot of information. But also such, such good questions. And hopefully those questions and answers were helpful to everyone on the call. And I think we're good. It seems like most has been answered. So we just thank you all. Please stay in touch and we will, we will continue to stay connected with all of you with updates and as we, you know, await this, await this FAFSA.

So that's, I think that's good. Have a great afternoon. Thanks everyone. Thank you.

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