Senator Lamar Alexander from Tennessee was given a retirement present in late December that he has been requesting for years. His fellow politicians put down their swords and spears long enough to delete almost two thirds of the questions from the FAFSA application then rubber stamped the legislation before Senator Alexander’s last day in office.
The intended outcome of this change is to encourage more families to complete the application. With more families completing the application, more deserving students will be identified and given financial assistance – at least that was the plan. As with anything done in a hurry, important details were overlooked. One very important detail is that aid could be reduced to families with more than one child in college at the same time.
The “expected family contribution” (EFC) has been replaced by the “student aid index,” the lower the index amount, the greater the need for assistance. Experts who have access to the new application have run the hypothetical numbers and have determined that there will be a slight increase in aid eligibility for lower-income families with multiple siblings in college, but a significant drop in eligibility for middle and upper-income families with two or more students in college at the same time.
For families with an annual household income of about $50,000 the changes are minimal, but for families with a household income of $100,000 or more, the amount of money their family is responsible for paying could almost double. With regards to those middle-income families, all is not lost – yet. The changes to the application will not go into effect for almost two years and a significant number of concerned individuals are already calling for changes to the new application.
If you have kids who will graduate in 2023 or later and your annual household income is less than $200,000, keep a close eye on the FAFSA conversation. It could literally double your college expenses on one hand or reduce them to less than a car payment on the other.