Students applying for financial aid will find additional features and a new question on the 2020-2021 FAFSA.
The 2020-2021 Free Application for Federal Student Aid, or FAFSA, may look a little different to students and families who have applied for college financial aid in prior years, whether they completed the form online or on a mobile device.
This year, one of the most significant changes to the FAFSA is the addition of a new question, triggered by the IRS’ elimination of certain income tax forms. Experts say this could have an impact on students’ expected family contribution, or EFC, which is a number generated by information provided on the FAFSA and used to estimate a family’s ability to pay for college.
Other changes include minor adjustments to the order of questions on the form and modifications to the app used by students and families to complete the FAFSA on cellphones or tablets.
A New Question Added to the FAFSA
When the IRS eliminated Forms 1040A and 1040EZ, which were previously used to help determine aid eligibility on the FAFSA, the U.S. Department of Education needed to create a new question on the FAFSA. Students and parents will see this new question for the first time on the 2020-2021 form, and experts say it may cause confusion for families and even affect the amount of aid awarded.
Misty Parkinson, director of applicant products and customer service at the Department of Education, addressed the change at a National Association of Student Financial Aid Administrators conference in July. She noted that the tax forms previously used to determine if a student is eligible for an automatic zero EFC, meaning he or she would receive the maximum financial aid, including the Pell Grant award, no longer exist. The Pell Grant is a form of need-based federal financial aid that does not have to be repaid.
“Those changes definitely created some challenges for us, particularly because the IRS was working on those changes at the same time we were working on the FAFSA,” Parkinson said. “Many of our students who qualified for simplified EFC calculation qualified because of the type of tax form they filed. We did not want to make it harder for those people to qualify for the simplified formula, so we spent quite a bit of time trying to come up with a reasonable proxy.”
Students and families completing the form will now be asked if they completed IRS Form 1040 Schedule 1. Their answer to this question helps determine how students’ aid is calculated.
“If you are a student who already filled out a Schedule 1, your EFC will be calculated as a regular EFC and not as a simplified EFC or EFC of zero,” says Amira Yahyaoui, CEO and founder of Mos, a company that created a single application for all federal and state financial aid but is not affiliated with the Department of Education. The simplified calculation is desirable, she says, because it does not consider assets like bank accounts, and the automatic zero calculation allows a student to be quickly identified as qualifying for the most aid.