FAFSA Changes Could Affect How Much Financial Aid Your Student Receives

FAFSA Changes Could Affect How Much Financial Aid Your Student Receives

07/21/2021 Tags: Announcements, In the News


New laws that went into effect late last year might affect how some families receive financial aid for college.

The goal of the new laws was to simplify the process and get more families to apply. But middle-class and high-income families might end up with less money than in previous years.

The changes go into effect in October 2022 for the 2023-24 academic year. Specifically, the new rules eliminated the multiple child discount. Previously, families with multiple kids in college got a financial ad break because their share of costs was divided by the number of students they had in college. Under the new laws, a family’s share is instead multiplied by the number of college students.

But it isn’t all bad news. Previously, students would get subsidized loans for 150% of the length of their education. So, if they attended a four-year program, they’d get direct subsidized loans for six years. Under the new rules, students can get subsidized loans for as long as it takes for them to complete their education program.

Also, cash donations no longer count as income. Instead, income from the student’s federal income tax return will be required.

For a high-level overview of the changes, click here. And if you need help planning for your kids’ college, please let us know.

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KEVIN EGGEBRAATEN

CPA




Investment advisory services are offered through Avantax Planning PartnersSM. Commission-based securities products are offered through Avantax Investment ServicesSM, Member FINRA, SIPC. Insurance services offered through licensed agents of Avantax Planning Partners. 3200 Olympus Blvd., Suite 100, Dallas, TX 75019. The Avantax entities are independent of and unrelated to CP Financial Services, LLP. Although Avantax does not provide or supervise tax or accounting services, our Financial Professionals may offer these services through their independent outside business. Not all Financial Professionals are licensed to offer all products or services. Financial planning and investment advisory services require separate licenses.



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