The crowd of parents and students was sparse during a presentation on federal financial aid for college at Lakewood High on Thursday. Florida students leave $300 million in federal aid on the table every year, but a simplified application form and expanded eligibility could boost interest. [ IAN HODGSON | IAN HODGSON ]

Millions of dollars in federal student aid sit unused each year, even as college costs rise and student debt skyrockets. Florida families are among the nation’s leaders in forgoing those funds.

But a streamlined application process is aimed at easing access and getting the money in more hands.

The Free Application for Federal Student Aid has undergone its largest overhaul in decades, according to the U.S. Department of Education. The form will be shorter, faster to fill out and easier to verify, the department said. Under a 2020 law simplifying the process, eligibility for federal aid will also be expanded for most students.

The only setback is that parents and students will have to wait longer than usual to get started on their applications for the 2024-25 school year. The department, which typically releases the application on Oct. 1, has indicated that the form won’t be ready until December.

Still, student aid experts said there are steps that families can take to prepare.

Here’s what you need to know.

A simplified form

Parents and students may recall the stress of organizing years of tax returns in preparation for the more than 100 questions on the application, including detailed financial information.

The new form is expected to include just 36 questions, including some new onesabout the applicants’ sex, race and ethnicity. Those questions will have no effect on federal student aid eligibility, according to the U.S. Federal Student Aid website.

The revised process pulls data directly from the IRS to calculate eligibility, ideally streamlining the arduous process of filling out financial information for parents. That should make the process faster and easier, said Todd Smith, director of Financial Assistance Services at St. Petersburg College. It’s also expected to cut down on the arduous verification process, which can eat up administrator time and delay funding decisions, he added.

Florida has among the highest share of low-income students in the country. Nearly 55% of 2022 high school graduates were eligible for federal funding for low-income students, called the Pell Grant, according to the Florida College Access Network — the sixth-highest rate in the nation.

Florida has among the highest share of low-income students in the country. Nearly 55% of 2022 high school graduates were eligible for federal funding for low-income students, called the Pell Grant, according to the Florida College Access Network — the sixth-highest rate in the nation.

The new federal aid form coincides with a revised funding formula, which is expected to increase aid to most students, especially those from lower-income families, according to a recent report from the Brookings Institution, a nonprofit research organization.

The formula increases the family income threshold, making more families eligible for the Pell Grant, which awards up to $7,395 per academic year.

The formula expands eligibility to families who earned more than the previous threshold and will provide more funds for students who were eligible for less than the maximum amount, said Phillip Levine, a Wellesley College economics professor who co-authored the Brookings report.

Federal aid eligibility also was restored to incarcerated students in the 2023-24 award year.

The Education Department recently released a Federal Student Aid tool to help students estimate how much aid they could receive under the formula.

Some will lose out

More students should be eligible for federal aid, and on average those eligible students should get more aid, but there are winners and losers, Levine said.

The formula removes the “sibling discount” for families with multiple students in college. For a family with a household income of $60,000 — roughly the median household income in Pinellas County — the outcomes diverge sharply depending on family size.

Students with no siblings in college can expect an extra $2,600 in federal aid, according to Levine’s analysis. But those with one sibling will lose $700 and those with two siblings will lose $1,800, on average.

Those cases are relatively rare, said Billie Jo Hamilton, vice president of enrollment planning at the University of South Florida. She estimates that 400 to 500 USF students have one or more siblings in college — out of the school’s more than 38,000 undergraduate students.

The school’s financial aid office is aware of the issue and has funding to ensure that no students have to alter their enrollment because of the new formula, she said.

Families who own small farms or businesses may lose out, since the value of those operations will now be counted as financial assets, according to the department.

The changes fix long-standing inequities in the formula that benefited some families, but the quick change may harm some students in the short run, Levine said.

“There certainly will be losers,” he said. “But we shouldn’t lose sight that most students stand to gain from these changes.”

What we don’t know

There is a lot unknown about the new form — including when it will finally be available. The projected start is set for December.

The department is required by law to release the form by Jan. 1, but some worry that the looming threat of a government shutdown could push the release back.

The delayed release and list of unknowns can feel daunting, Hamilton said, but colleges and universities are there to help. Financial aid officers will need tobecome familiar with the new form and datawhile processing applications, but change is nothing new for higher education, she said. “We’ve learned to roll with it.”

Here’s what to do now

The most important action parents and students can take is to sign up for an identification number, known as a Federal Student Aid ID. Everyone who contributes information to the application is required to have their own number. It can take two to three days to get an ID once you sign up, which is all the more reason to sign up now, Smith said.

Students also can use the time to research school grants and independent scholarships, many of which don’t depend on federal aid data. Starting now on essays and applications could maximize the support they receive in the fall, he said.

Ian Hodgson is an education data reporter for the Tampa Bay Times, working in partnership with Open Campus.

Education data reporter for The Tampa Bay Times in partnership with Open Campus.