If you’re looking into financial aid for the upcoming 2020–2021 school year, you should be aware of important FAFSA updates. There are a number of alterations from last year’s form—from question eliminations to some much-needed updates.
Here’s what you need to know about the 2020–21 FAFSA.
Why is it Updating?
There are two main reasons for the FAFSA updates. The first is that IRS tax forms have changed. For the 2020–21 FAFSA, filers will use their 2018 tax returns. However, the 2018 tax returns have a few updates of their own, and the FAFSA had to change to reflect that. (We’ll get into the details later).
The second reason is that the Department of Education developed a mobile FAFSA app in 2018 in an effort to streamline the process and make the form more accessible to students. Some features have been modified, and others have been added.
Reforming the Tax Return Responses
The Tax Cuts and Jobs Act of 2017 made alterations to the 2018 taxpayer forms. Since the 2020–21 FAFSA will use 2018 tax returns, the FAFSA itself needed an update too. These updates are mostly slight question and response modifications.
The Elimination of 1040A and 1040EZ Responses
In prior years students and parents were asked: “What income tax return did you file or will you file…?” However, the IRS eliminated forms 1040A and 1040EZ in the Tax Cuts and Jobs Act. So the FAFSA has updated the responses that question (33 and 80), removing the 1040A and 1040EZ as options.
Additionally, the IRS forms 1040NR and 1040NR-EZ will be added to the foreign tax return response to accommodate these new tax forms.
The Schedule 1 Question
Replacing the inquiry about 1040A or 1040EZ eligibility, questions 35 and 82 now ask: “Did (or will) you file a Schedule 1 with your 2018 tax return?”
What is a Schedule 1 FAFSA?
So, what is a schedule 1 FAFSA? The Schedule 1 FAFSA refers to “Additional Taxes and Adjustments to Income” that aren’t directly reported on 2018 form 1040. It’s used to report additional types of income including:
- capital gains
- unemployment pay
- prize money
- gambling winnings
- student loan interest deduction
- self-employment tax
- or educator expenses.
So, if you had to file a Schedule 1, be sure to have the form handy when filing this year’s FAFSA.
Combining Untaxed Questions
As part of the Tax Cuts and Job Act, the IRS combined untaxed portions of IRA distributions with untaxed pensions on their forms. As a result, the FAFSA also combined the questions about untaxed portions and pensions into one—you’ll now find them as 44a and 92e.
Changes to the Student Aid Report (SAR)
The FAFSA form itself isn’t the only thing getting a 2019 makeover. Filers will receive a Student Aid Report (or SAR) after they successfully submit the FAFSA. The SAR explains what federal financial aid the filer is eligible for, as well as show their calculated EFC. There are a few changes this year.
SAR Available on myStudentAid
In 2018 the myStudentAid app was launched, and students could file the FAFSA on their phones. New to the 2020-21, the SAR will now also be available through the myStudentAid mobile app.
Children of Fallen Heroes Scholarship
Additionally, an indicator on the SAR will show college financial aid offices whether or not the student qualifies for the Children of Fallen Heroes Scholarship. Created in 2018, the scholarship is awarded to Pell-eligible students whose parent or guardian died in the line of duty while performing as a public safety officer. The student is eligible to receive the maximum Pell Grant for that year. The eligibility indicator will show up in the For Financial Aid Office Use Only section of the SAR.
There are, of course, some minor cosmetic changes and reordering/renumbering of questions due to the edits made. Here are a few more updates:
- The question order on FAFSA.gov is being updated to align with myStudentAid.
- The student’s social security number (SSN) at login will be masked on FAFSA.gov as it is currently on the app.
- The IRS Data Retrieval Tool (DRT) will have a mobile-responsive version for the myStudentAid app.
The FAFSA is available starting October 1st. Students and their families are highly encouraged to file the FAFSA. When students file, they become eligible to receive the benefits of federal financial aid and qualify for federal student loans.
Have questions while filing the FAFSA? Check out our handy Question by Question FAFSA Guide!