FAFSA changes bring hope, anticipation across Iowa universities

IOWA CITY — Universities nationwide, including those across Iowa, are prioritizing access and affordability to higher education among their recruiting strategies — even as tuition rises — and many hope a first update to the Free Application for Federal Student Aid in many decades will help.

“It is certainly the hope of financial aid professionals that the FAFSA simplification process will create greater access to financial aid and will allow more families to complete the FAFSA,” Iowa State University Director of Student Financial Aid Chad Olson told The Gazette, acknowledging concerns about delays and hiccups as the update rolls out.

“With any new process, there may be some delays or interruptions of service once the new FASFA platform goes live,” Olson said. “We all need to remember to be patient through this year's implementation and acknowledge, in the long run, FAFSA simplification should allow for a quicker application process.”

One key FAFSA change — compelled by a series of new laws like the FUTURE Act and Consolidated Appropriations Act of 2021 and 2022 aimed at making FAFSA use easier — is fewer questions. The Internal Revenue Service now can share federal tax and income information directly with the FAFSA office erasing some of the more cumbersome tasks from the old FAFSA filing experience.

“The new FAFSA will make it easier than ever for students to get financial aid for college and help 610,000 more students from low-income backgrounds receive Pell Grants,” according to a Nov. 15 letter published through the U.S. Department of Education on the FAFSA changes. “In total, it will allow 1.5 million more students access to the maximum Pell Grant award, bringing the total number of students eligible for the maximum Pell Grant to over 5.2 million.”

Pell Grants are federal aid awards available to undergraduate students showing “exceptional financial need” who have not yet earned any bachelor’s, graduate, or professional degrees. Among the FAFSA-related changes is one allowing individuals who are confined or incarcerated but enrolled in a Prison Education Program to get aid.

“Drug convictions no longer affect federal student aid eligibility,” according to the updated federal guidance. “As of July 1, 2023, if you are subject to an involuntary civil commitment for a sexual offense, you may qualify for a Federal Pell Grant.”

Demographic shifts

Although the federal government provides the most student financial aid across Iowa’s public universities year after year, its total distributions have been falling — dropping to $484.3 million in the 2021-22 school year, according to the most recent Board of Regents data available.

That is down from $503.4 million the year prior and from $570.9 million a decade ago in the 2011-12 academic year. Meanwhile, Iowa’s public universities have tried to fill the gap with “institutional aid,” increasing their total awards in 2021-22 to $439.4 million from $412.7 million the year prior and $254.4 million in 2008-09.

Iowa is in line with national trends, showing total U.S. student federal aid has fallen from $203.4 billion in 2010-11 to $134.4 billion in 2020-21. Institutional grants over that span have increased from around $40 billion to 71.1 billion.

Iowa’s regent universities are focused on access and affordability for current, incoming, and prospective students as demographics shift among the state’s high school populations — with low-income, minority, and first-generation numbers swelling even as total high school graduates and thus college-bound numbers are expected to drop beginning in 2026.

On top of that, neighboring states that typically provide a majority of Iowa’s out-of-state enrollment are looking at steeper student declines — like Illinois, facing a predicted 24 percent loss in high school graduates between 2019 and 2037.

Within Iowa, the percent of high school graduates enrolling in any college has dropped 10 percentage points from 2019 to 2022 — with some citing cost, as Iowa’s public universities have upped tuition rates.

The Board of Regents has pointed to the Legislature for those increases, as lawmakers in recent years have deprived them of their requested appropriations, forcing an increased reliance on students and families to fund operations.

Part of getting more high schoolers into college is filing a FAFSA — with Iowa reporting a 53 percent completion rate in the last cycle and a slight uptick, with 20,664 applications complete for the class of 2023, compared with 20,234 completed for the 2022 class.

'Hard at work’

That has the new FAFSA changes, while aimed a smoothing out the process, making some people nervous — given delays in availability.

Where the FAFSA process opens Oct. 1 in a typical year, with a Dec. 1 priority filing deadline for maximum financial aid consideration, this year’s FAFSA process has not even started. The U.S. Department of Education has announced its new application will be available by Dec. 31, with a deadline for maximum aid consideration of Feb. 1.

“The delays are due to the time it is taking the DOE, its contracted vendors, and government agencies to implement changes required by the FAFSA Simplification Act,” UI spokesman Steve Schmadeke told The Gazette.

Given those delays and the fact FAFSA forms help determine a student’s eligibility for federal, state, private, and university assistance through scholarships, grants, and other aid like work-study programs and subsidized loans, the UI Office of Student Financial Aid is staying open over the winter break — except for Dec. 25 and 26 and Jan. 1.

“The University of Iowa’s Office of Student Financial Aid is hard at work supporting students and their families,” Schmadeke said.

“We’re here to support our students and their families through what we understand is an extraordinary amount of change,” Brenda Buzynski, UI assistant provost and director of student financial aid, told The Gazette.

Although Iowa’s public universities and the federal government annually distributes millions in scholarships and grants to UI students based on merit, need-based awards account for a bigger chunk of the aid — and have been increasing.

Need-based scholarships and grants for Iowa’s public university undergraduates swelled to $142.1 million in 2021-22, up from $102.8 in 2014-15, according to the Board of Regents. And while FAFSA filing has remained mostly stagnant among resident students across the public universities, the percent of non-resident aid and FAFSA filings has increased.

At the University of Iowa, for example, 65 percent of non-residents completed a FAFSA or aid application in 2021-22, up from 59 percent in 2019-2020. The percent of their need met increased to 77 percent last year from 50 percent just two years prior.

At Iowa State, Olson said residents with financial need has been decreasing.

“But for those who have need, they demonstrate greater financial need.”

Vanessa Miller covers higher education for The Gazette.

Comments: (319) 339-3158; vanessa.miller@thegazette.com