In Texas, the high school classes of 2021 and 2022 left almost $886 million in Pell Grants unclaimed by not completing the Free Application for Federal Student Aid, better known as FAFSA. That is in spite of the state’s mandatory FAFSA completion policy that started during the 2021-22 academic year. 

Results of an Urban Institute study published in April 2023 showed that people did not complete the FAFSA for such reasons as unfamiliarity with financial aid alternatives, an unawareness of eligibility requirements, and a lack of understanding the FAFSA form.

To make the form easier, Congress enacted the FAFSA Simplification Act in 2021. The new FAFSA, branded the “Better FAFSA,” should debut by the end of December. The application is a gateway to more than $150 billion in college grants, work-study funds and federal student loans.

The U.S. Department of Education shared that the updated application will be more user-friendly with fewer and simpler questions. It also will expand on the eligibility for federal financial aid, reduce verification, and make accommodations for groups such as low-income families and English Language learners.

Mayra Mendoza, a business administration major at El Paso Community College, said she is aware of the new form and looked forward to using the application to see if it is as straightforward as it is reputed to be.

“I’m happy with the change,” she said after her participation in the Nov. 14 Student Resource Fair at the college’s Rio Grande campus. The Northeast resident, who is a wife and mother with a part-time job, said that the college has kept her aware of the new form through emails and letters. “I like that it will be quicker and easier.”

Members of EPCC’s financial aid team said that it was important to inform the students and their families about the new application process because about 75% of the college’s students receive financial aid. Among the most common questions students ask about the Better FAFSA include how it will affect them and when it will launch.

The Department of Education (DOE) usually releases the FAFSA forms on Oct. 1, but organizers needed more time to prepare the application and necessary software. Officials said future FAFSA cycles will revert to an Oct. 1 start. As a result of the late launch, the Texas Higher Education Coordinating Board announced in October that the 2024-25 State Financial Aid Priority deadline would be March 15.

Representatives from EPCC and the University of Texas at El Paso said that their financial aid offices share everything the Department of Education gives them about the new applications through their websites and in-person presentations. Topics include the need to obtain an FSA (Federal Student Aid) ID and changes in terminology. Both institutions plan on FAFSA workshops early in the spring semester.

Brenda Juarez, an EPCC financial aid coordinator, said that her office uses the internet and in-person presentations to keep students, families and counselors aware of updates to the new FAFSA that should open by Dec. 31, 2023. (Daniel Perez / El Paso Matters)

The new FAFSA includes substantive changes to the formula that determines the amount of financial aid a student is eligible to receive from the government and an institution. For example, the new system eliminates the discount a student obtained when their siblings also are in college. As a result, some students may receive more than expected while others will receive less.

One of the ways the government has simplified the process is that federal tax information will be transmitted directly from the IRS to the form if the applicant gives his/her consent. Another of the changes is the removal of the exemption for family farms or small businesses with fewer than 100 employees.

Brenda Juarez, an EPCC financial aid coordinator Records Management, Training and Outreach, talked about the new application process with a few of the students who stopped at her table at the recent resource fair. During a break, she said that her main Better FAFSA message to students is to not stress out.

“We tell them not to worry,” said Juarez, whose office has received regular FAFSA updates from the DOE since June. “We’re confident we can help our students.”

Juarez said she encourages everyone who needs to sign off on the application to confirm they have an email address and a validated FAS ID, a combination username and password, which will be necessary to complete the application. It takes one-to-three days for the identification to be verified. There also is a procedure for those who do not have a Social Security number.

The DOE released information Nov. 15 that the number of Texas students who would be eligible to receive a Pell Grant under the new FAFSA would increase by almost 51,300, and the ones who would earn the maximum Pell amount would expand to approximately 132,700. A Pell Grant is federal need-based aid awarded to millions of students annually. Under the new form, Pell eligibility will be linked to family size and the federal poverty level.

According to the National College Attainment Network, 531,388 Texans earned almost $2.3 billion in Pell Grants during the 2021-22 academic year. NCAN reported that as of the end of September 2023, the average FAFSA completion in Texas was 67%. The national average was 59%. 

In past years, El Paso County’s high school seniors have done a good job with FAFSA completion. According to the DOE, 87% of El Paso’s seniors submit finished forms.

Vanessa Sepulveda said that she is interested in the new FAFSA because she wants her son, a senior at Del Valle High School, to apply as soon as possible. She said the school has done a good job of keeping her informed about the changes to include the eligibility of more students for financial aid.

“They have told us to be on the lookout (for the new FAFSA),” Sepulveda said. “We were encouraged to get it done. As a single parent, I hope (my son) gets financial aid.”

Bill DeBaun, senior director of data and strategic initiatives at NCAN, said that the relatively late roll out of the new application concerns him. NCAN is a Washington, D.C.-based nonprofit that works to close equity gaps in postsecondary attainment for students.

DeBaun said 50% of high school seniors usually complete their first FAFSA during the October-December time frame. The late FAFSA launch will push a large volume of applications into the spring semester and that will put a lot of pressure on school counselors, financial aid administrators, college access advisors and every other caring adult involved in an unfamiliar process.

To help families and college access professionals prepare for the new application, NCAN created numerous online tools and organized a “Getting Ready for Better FAFSA Zoom webinar series. The final presentations this year will be from 11 a.m. to 1 p.m. Mountain Time on Nov. 20 and Dec. 4.  

Along with the FSA ID, DeBaun advised counselors to connect students with external scholarships and identify students whose backgrounds may create additional challenges when they fill out the FAFSA.

As for the ripple effect of the late launch, DeBaun said that some students who submit their FAFSA in January may not receive their financial aid packages from their prospective colleges until mid- to late-February. He hoped that the delays would not discourage some students from filling out the form.

The NCAN official said he could not stress enough the importance of FAFSA completion because the alternative is that students could not access the federal aid that can put them on a life-changing post-secondary path.

“I would be lying to you if I said I wasn’t concerned about that,” DeBaun said. “Every professional in this field knows what the stakes are for students and families.”

Higher education reporter for El Paso Matters in partnership with Open Campus.