October is here which means the FAFSA has arrived. This year, for the 2021-2022 school season, the FAFSA has a few updates. While there aren’t as many changes as previous years, it’s still important to know what is different.
Read on to discover what major changes the FAFSA form has in store.
$0 EFC Threshold Increase
A major component of the FAFSA is calculating EFC–or Estimated Family Contribution. This is the amount of money a family is expected to pay out of pocket for their child’s education. (Note: it is an estimate, not a definitive number your family will necessarily have to pay). Depending on the calculated EFC, the FAFSA will the student a certain amount in aid or loans.
Previously, the income threshold for an automatic $0 EFC was $26,000. Meaning that if a family earned an income lower than $26,000, they weren’t expected to pay anything out of pocket and would qualify for more financial aid.
For the 2021–2022 school year, the FAFSA has increased that threshold to $27,000.
Schedule 1 — With DRT
The IRS Data Retrieval Tool (or DRT) is a handy tool that automatically fills in tax return information if you’ve already filed your returns. It saves a lot of time.
Schedule 1 refers to “Additional Taxes and Adjustments to Income” that aren’t directly reported form 1040. This year, “capital gains” has been removed and “virtual currency” added to the examples of additional income. Other examples include unemployment pay, prize money, gambling winnings, student loan interest deduction, self-employment tax, or educator expenses.
For the 2021–2022 FAFSA, the DRT can automatically fill in the question regarding whether or not you’ve filed a Schedule 1.
Schedule 1 — Without DRT
If you’re not using, or are ineligible to use, the DRT, questions 35 and 82 must be answered manually. As previously stated, Schedule 1 now includes the most current examples of additional income.
In addition to FAFSA form changes, the MyStudentAid app has likewise undergone some updates. They include the following:
A personalized page that outlines status and actions to take.
Manage account using FSA ID.
An overview of previous federal student loan and grant history.
View notifications and updates in regard to your financial aid.
Ready to File the FAFSA?
The 2021–2022 FAFSA certainly isn’t an overhaul of the form—to the relief of many. All the same, it’s important to note any changes and adjust your answers accordingly. After all, it’s vital to enter the most relevant information so you can get the aid you’re owed.
If, for some reason, you submit an error or your financial situation changes after you file the FAFSA, be sure to correct the information as soon as you can.
The effort you put into filing the FAFSA will be well worth it. Federal grants, loans, and access to the work study program can help put students through college. Remember, federal aid is typically more flexible than private loan options.
If it’s your first time filing, or you want a refresher, be sure to check out our question-by-question FAFSA guide!