It might be an understatement to say the United States hasn’t won any prizes to date for its ability to bring large-scale software releases to the public on either a state or federal level. Who can forget trying to file for unemployment benefits or schedule a first vaccine jab during the Covid-19 pandemic? Or the failed launch of in 2013?

So what are the chances that the third time’s a charm when the Department of Education (DOE) rolls out its simplified Free Application for Federal Student Aid (FAFSA) in December?

“You can take it to the bank that site’s going to crash the first day,” says Heidi Huiskamp-Collins, a financial advisor in Bettendorf, Iowa. “And we don’t even have clarity which day that will be. They say December, but the 1st? The 31th?”

Whenever that rollout occurs (already two to three months behind the usual October 1 FAFSA form release), approximately 17 million-plus students will be affected—as will their parents and some of their financial advisors. But the potential for breakdown does not end there, sources say. Colleges, which typically offer early action and early decision spots beginning in December, may either have to issue acceptances without financial aid packages or delay notifying students of their intentions.

“The big takeaway is that the high school class of 2024 are definitely guinea pigs,” says Brad Baldridge, college funding specialist and CFP at Baldridge College Solutions in Milwaukee. “Everyone’s going to have to have a lot of patience. It’s going to be hard for the colleges to be ready. They won’t even learn about the changes they need to make to hook the computers together until the summer.”

And on top of that: Huge changes are coming this year to the way financial aid is calculated, and those changes are already being misinterpreted, he says. “There are a lot of little details that can really change the picture on paying for college,” Baldridge says. “And many financial advisors are spreading misinformation already. Those who have used a reasonable rule of thumb in the past are going to find out very soon it no longer applies.”

Some of those changes affect exactly the kind of families who would have a financial advisor: Business owners, for example, now have to find a valuation for their business; families in high-tax states won’t get a tax credit, and there’s no longer a FAFSA “multi-student discount” for families with more than one child in college concurrently.

There’s no doubt that students and their families—the demand side of the higher education equation—will face uncertainty as they navigate paying for college in 2024. But that’s nothing compared with what the colleges are facing, Huiskamp-Collins says.

“The colleges are going to be terrified if the rollout doesn’t go smoothly,” she says. “Students have been waiting longer and longer to commit. It used to be May 1 that you had to make up your mind. Until then, private schools especially don’t know who’s in their freshman class by a long shot. They’ll have unfilled seats in the freshman class of over 50% a lot of times.”

A Welcome Change
It might be that more financial advisors will find themselves involved in the process now that the DOE, in a series of changes, has committed to knocking back the number of questions on the FAFSA to 36 from 108, changed the way aid is calculated so that more families will qualify for full or partial Pell Grants and shifted the reporting date for asset values.

“The FAFSA simplification is going to provide more financial aid to lower-income students and potentially less for middle- and high-income students,” says Mark Kantrowitz, a financial aid consultant in Skokie, Ill. “College is still expensive, while family income has been relatively flat. And it’s a challenging time with above-average inflation. So there’s still more need for middle- and high-income families to save for college. Paying for college is not getting easier.”

And what are those 36 questions? No one knows. According to the DOE website, financial aid administration training will begin sometime over the summer, and details of the new form will be included in that training. The first time families will be able to see it is at the December launch.

Despite the lack of confidence advisors have vis-à-vis the DOE hitting its deadlines, the simplified form is a welcome change, sources say. Many parents who guessed they made too much money for aid in the past didn’t bother filling out the 108 questions on the FAFSA form at all.

“I tell people making $300,000 and up to half a million to make sure they fill out the form. I know it’s another thing to do, but I’ve had people making $400,000 who’ve gotten aid. It’s totally worth trying,” Baldridge says. “And now the form is going to be simpler. So just fill it out.”

Part of the simplification, he says, is due to FAFSA wanting as much information as possible to come from a family’s tax return. Huiskamp-Collins adds that there is a shift away from income being the focus to assets.

“But the reality of that is it doesn’t collect much of the information the colleges will be able to plan with,” Baldridge continues. “Long term, the simplification is a complication because most colleges are going to have to use something else in order to make sure they’re seeing the entire financial picture.”

A More Generous Formula
One thing the simplified form will help with is Pell Grants, sources said. In the past, the form used a formula to determine a figure called the “Expected Family Contribution,” or EFC, which, despite its wording, was not a determination of what a family was expected to pay. Beginning with the 2024-2025 FAFSA, the form will replace that with a formula to calculate a Student Aid Index (SAI).

The index is just that, the amount of financial aid a student will receive. And while the Expected Family Contribution and Student Aid Index are somewhat similar, the new index formula is more advantageous and will help more families qualify for a Pell Grant than would have under the EFC, Baldridge says.

“They’ll be able to hand out Pell Grants more quickly to lower-income students,” he says. “Anyone who received a full Pell in the past will continue to get it. Someone who used to get a partial Pell grant might get a full. And there is a whole swath of people who were close in the past who will get a partial now.”

In addition, the new formula means there’s also a group of students who will suddenly qualify for a subsidized Federal Direct Loan, when in the past they didn’t. “A family with a freshman or sophomore in college today may find once they use the 2024 calculator that their aid could be drastically different,” Baldridge says. “As a matter of course it will be better for just about everyone who was close to qualifying before.”

More Planning Opportunities
Whenever the new form comes, it’s expected to provide more opportunities for college planning, sources say. Just not this year. But by the time the freshman class of 2025-2026 is thinking FAFSA, the entire industry will have clarity on the key issues.

One change that advisors and clients will have to consider is that the snapshot of assets is no longer tied to the end of the calendar year but to the day the FAFSA is filed, so timing the filing could be an important financial strategy.

Financial advisors can help parents decide when to take a compensation bonus at work, if that’s an option. “If you can choose to take your bonus in December or January, then do it in December the prior year. Get it out of the base year so colleges never see it,” Baldridge says.

But, as Huiskamp-Collins says, effective use of that strategy for 2024-2025 would require knowing what the base year is. “We still don’t have a reference year,” she says. “It’s always been the prior-prior year, but is it now going to be prior year? We won’t know until we see the form.”

And what colleges offer in their packages and what the new FAFSA rules say are two different things, Baldridge says. “We don’t know what the colleges are going to do. These are the rules, and they’re federal rules. That’s solid. But we don’t know about the colleges,” he says. “Some colleges won’t change anything. They compete with each other, so the one who changes first loses.”

There’s always at least one round of recourse if a family thinks it should receive more assistance, especially if there are multiple kids in college and they know that colleges may be scrambling to fill those freshman seats.

“It’s still in the game that if you want to challenge a financial aid award letter you have that ability, and I think families are going to be using that challenge a lot more next year. If you have multiple kids in college, you have larger outlays,” Huiskamp-Collins says. “I believe everyone should challenge their award letter.”