Discover® Student Loans Survey Reveals Majority of Parents with College-Bound Children Are Unaware of Upcoming Changes to the FAFSA®

Rhea-AI Summary

The FAFSA Simplification Act aims to make the Federal Application for Federal Student Aid (FAFSA) easier and more accessible. However, a majority of parents are unaware of the act and the delayed opening of the FAFSA form for the 2024-2025 school year.

Positive

• The FAFSA Simplification Act will result in a more streamlined application process and expand eligibility for financial aid. The new FAFSA form will have significant changes, including a reduction in questions and an increase in the number of schools included in the school list. The way aid is distributed will also change, potentially increasing the maximum amount eligible recipients receive. Most families are planning to fill out the FAFSA for the upcoming school year.

Negative

• 84% of parents are not aware of the delayed opening of the FAFSA form for the 2024-2025 school year. A majority of parents are also unaware of the FAFSA Simplification Act.

A New, Simplified Form, Created as Part of the FAFSA Simplification Act, Will Create a Better User Experience, But 84% of Parents Not Aware That the Form Will be Delayed

RIVERWOODS, Ill.--(BUSINESS WIRE)-- According to a national survey from Discover Student Loans, a majority of parents with college-bound children (88%) haven’t heard of the FAFSA Simplification Act, which aims to make the Federal Application for Federal Student Aid (FAFSA®)¹ easier to complete and expands financial aid eligibility. In addition, 84% of parents were not aware that the redesigned FAFSA will cause the form to open later than October 1 this year – now likely opening in December – for the 2024-2025 school year.

FAFSA Simplification Act creates a better user experience for those applying for financial aid

“The changes to the FAFSA will result in a more streamlined application process,” said Rich Finn, vice president of Discover Student Loans. “The updated FAFSA will also expand eligibility for financial aid, improve access and create a better user experience overall. Discover Student Loans encourages everyone to fill out the FAFSA, regardless of their income, as most people qualify for some kind of aid.”

According to the survey, 19% of respondents who aren’t planning to fill out the FAFSA say it's because they don’t believe they qualify for federal aid.

The new FAFSA form will include a number of changes. A few of the most significant changes outlined on studentaid.gov include:

• A significant reduction in questions, from 108 questions to 36
• School list expanded to include up to 20 schools, an increase from the previous 10
• Easier completion with student and parent-specific questions
• Gifts and 529 Plan distributions from anyone other than a student’s parents will no longer have to be reported as non-taxed income
• Direct data exchange with the IRS allows tax information to be transferred directly into the FAFSA

The way aid is distributed will also shift with the new FAFSA. The Expected Family Contribution (EFC) index number is being replaced with the Student Aid Index (SAI). Unlike the EFC, which can be as low as $0, the minimum Student Aid Index will be -$1,500. This could help allow for more accurate targeting of need-based aid. Additionally, the new process will expand aid to those who receive Pell Grants. The amended formula will now incorporate family income, family size and federal poverty level to determine eligibility, which will likely increase the maximum amount eligible recipients receive from 60% to an estimated 76%.

Most families are planning to fill out the FAFSA for the 2024-2025 school year

According to the Discover Student Loans survey, 78% of families are at least somewhat familiar with the FAFSA, and 70% of families plan to fill out the FAFSA this year. Despite a tentative opening date for the 2024-2025 FAFSA in late December, 67% of parents also plan to fill out the form right away, within the first month of its availability. Additionally, more than half (51%) of parents are leveraging online FAFSA guides and resources to assist in filling out the application.

The FAFSA’s delayed release may catch parents off guard,” said Finn. “With so many changes to the form, it will be important for families to plan ahead to get the most financial aid. Discover has free tools and information for families navigating the FAFSA application, such as this FAFSA Guide and these Common FAFSA Myths.”

With more than one quarter (28%) of parents saying their child plans to choose their college based on price, Discover Student Loans encourages every family to complete the FAFSA. Schools you apply to will use the information provided to determine how much aid you’ll receive, which can reduce the cost of college.

For more information on the FAFSA and how families can leverage student loans to pay for college, visit DiscoverStudentLoans.com.

About the Survey

All figures, unless otherwise stated, are from a Dynata (formerly Research Now/SSI) survey conducted on behalf of Discover Financial Services. The survey was conducted online and fielded by Dynata with a total sample size of 1,000 parents of children ages 16-18 who plan on attending college or trade school. The margin of sampling error was 3 percentage points with a +/-5 percent level of confidence.

About Discover

Discover Financial Services (NYSE: DFS) is a digital banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company issues the Discover^® card, America's cash rewards pioneer, and offers private student loans, personal loans, home loans, checking and savings accounts and certificates of deposit through its banking business. It operates the Discover Global Network^® comprised of Discover Network, with millions of merchants and cash access locations; PULSE^®, one of the nation's leading ATM/debit networks; and Diners Club International^®, a global payments network with acceptance around the world. For more information, visit www.discover.com/company.

¹ FAFSA is a registered trademark of the U.S. Dept. of Education and is not affiliated with Discover Student Loans.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231011340689/en/

Sheetal Shah

Discover

sheetalshah@discover.com

224-405-0297

@Discover_News

Source: Discover Financial Services

FAQ

What is the FAFSA Simplification Act?

The FAFSA Simplification Act aims to make the Federal Application for Federal Student Aid (FAFSA) easier to complete and expands financial aid eligibility.

What are the changes in the new FAFSA form?

The new FAFSA form will have a significant reduction in questions, an expanded school list, easier completion with specific questions for students and parents, and direct data exchange with the IRS.

How will aid distribution change with the new FAFSA?

The Expected Family Contribution (EFC) index number will be replaced with the Student Aid Index (SAI), potentially allowing for more accurate targeting of need-based aid. The amended formula will also incorporate family income, family size, and federal poverty level to determine eligibility.

Are families aware of the FAFSA Simplification Act and the delayed opening of the FAFSA form?

No, a majority of parents are unaware of the FAFSA Simplification Act and the delayed opening of the FAFSA form for the 2024-2025 school year.

Are families planning to fill out the FAFSA for the upcoming school year?

Yes, according to the survey, 70% of families plan to fill out the FAFSA this year, with 67% of parents planning to fill out the form right away.

How can families get more information about the FAFSA and student loans?

Families can visit DiscoverStudentLoans.com for more information on the FAFSA and how to leverage student loans to pay for college.