Students and families completing FAFSA forms this year might notice a few changes from previous years. The Free Application for Federal Student Aid has fewer questions this year. The new approach to assessing the ability of students to afford college is part of the FAFSA Simplification Act.
To make the student aid process more predictable for low-income students, the new policy allows students with an adjusted gross income below specified levels to automatically qualify for a maximum Pell Grant. The AGI threshold is either 175% or 225% of federal poverty guidelines, depending on the student’s dependency status and marital status.
The FSA amendments make additional changes to award rules and some eligibility criteria. However, American Farm Bureau is warning that some of those changes may have a negative impact on families who farm or own small businesses.
The exemption for families who owned farms and small businesses and had an adjusted gross income of $60,000 or more is no longer applicable. Under the old rules, families with a farm or business valued at $1 million would have to pay around $7,600 toward education. Under the new rules, the same family would be responsible for more than $41,000.
Legislation has been introduced in both houses of Congress in an attempt to reinstate the exemption.