View from Campus: Easing the Complexities of The FAFSA Simplification Act

Congress passed the FAFSA® Simplification Act in December 2020 to streamline the FAFSA application process for students and families seeking financial aid. For colleges and universities, the FAFSA Simplification Act aims to simplify the financial aid application process and reduce the administrative burden on staff. However, the changes in how aid gets determined presents several challenges from a systems perspective.

Over the last three years, the Department of Education has implemented FAFSA changes in phases beginning with the 2021-2022 Award Year, with the final phase of the changes set to occur in the 2024-2025 Award Year. Integrating the new simplified data requirements into existing institution systems and databases is technically complex and resource intensive. It also will require updates of current configuration or overhauls of legacy systems.

While the FAFSA changes impact every higher education institution, there are key takeaways for institutions live on Workday Student, in process of a Workday Student deployment or planning for a Workday Student go-live in the next academic year.

The Specifics

The FAFSA form for the 2024-25 year will open in December 2023, a few months later than usual. Two important changes to the Higher Education Act of 1965 (HEA) and the FAFSA for this year include:

• Financial aid applicants will be able to securely transfer their IRS tax information without using the IRS Data Retrieval tool which will make the application process faster and less complex; and

• Federal Pell Grant eligibility calculations will be expanded and will be directly tied to family size and poverty level.

The changes were implemented to increase accessibility to Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (SEOG), Federal Direct Subsidized and Unsubsidized Loans, Federal TEACH grant and Federal Direct PLUS loans.

Examples of the Changes You Can Expect

The changes also impact the way information gets processed. Upon completion of the FAFSA, a student aid report (SAR) is generated, showing the student aid index (which replaces the expected family contribution) and federal aid eligibility. Institutions will receive the institutional student information record (ISIR) which gets loaded into the Workday tenant and the information is used to calculate the exact amount of eligibility.

When the U.S. Department of Education processes a FAFSA application, comment codes and text are generated to act as an alert to the student and to the Financial Aid Office that a student cannot receive aid until an issue is resolved. Changes to the FAFSA format to allow for new comment codes and text may require adjustments or updates in how educational institutions integrate with the FAFSA to receive and process financial aid information.

Another change relates to student status and whether a student is considered a dependent or independent student. Students who indicate they have an unusual circumstance preventing them from providing parental information will be granted a provisional independent status. The Financial Aid Office must review and make a decision on this status no later than 60 days after the student enrolls.

The Impact on Institutions Live on or Deploying Workday

To understand how this impacts institutions that are live on Workday or in the middle of a Workday deployment, let’s consider the cost of attendance for students as an example. Room and board expenses are now categorized as living expenses, which is expanded to include housing, food, transportation, and personal expenses. For organizations operating Workday, they must work with their consulting partners to design and create new calculations to meet the updated requirements, with an understanding that things will change in short order. In most cases, this will mean going back and redoing work that has already been done.

Another way this will impact institutions live on Workday is the process of going back through the current configuration and confirming the changes for 2024-2025 do not impact the ability to continue processing aid for 2023-2024. Integrations will also need to change due to different application fields.

What You Can Do to be Successful During the 2024-2025 School Year

The FAFSA changes for the 2024-2025 school year will have a huge impact on the administrative financial aid staff for colleges and universities. It will bring a complete change in process, requiring staff to have to learn new process standards for grants, scholarships, and loan programs. The changes will also slow down the financial aid application process, creating anxiety for students who may be uncertain about what is happening to their financial aid. Additionally, most institutions have limited resources and are already telling their staff to expect to work on the changes over winter break, which can impact morale and cause burnout.

The FAFSA Simplification Act will impact university and college staff, students, institution processes, and technology. It is important to take steps to ensure staff and students are ready and comfortable with the changes coming, including:

• Supporting staff as they learn the new processes
• Being transparent about the changes, the stress it might cause and the long hours needed to implement the changes
• Communicating with students about the possible delays in the FAFSA application process

Partnering with a consulting team with Workday Student and higher education experience that can help your organization update the system is key to navigating The FAFSA Simplification Act and updating your Workday system. Avaap’s Workday Student experts are currently helping institutions prepare for these changes, including updating configuration to meet new regulations, ensuring student information is collected and stored properly, and automating processes to limit manual intervention. The time is now to think about how you will navigate the changes and deliver an optimal experience for students and staff. 

Avaap’s Workday Student team is the most experienced higher education consulting team. All Avaap Workday Student consultants come from higher education, bringing perspective from industry and Workday consulting. If your organization needs assistance navigating The FAFSA Simplification Act and updating your Workday system, fill out the contact form and an Avaap representative will schedule time to discuss your road to success.