The Financial Aid Form Gets a Makeover

Starting with the FAFSA available for filing in October 2022, the number of questions will be reduced from 108 to 36.

Student aid form with hundred dollar bills and pen resting on it
(Image credit: Getty Images)

Among the numerous provisions buried in the 5,000-plus-page Coronavirus Response and Relief Supplemental Appropriations Act that was enacted late last year are measures designed to streamline the Free Application for Federal Student Aid, or FAFSA. The form is used to determine how much financial aid a student will receive from federal and state governments, colleges and universities. The changes will also expand eligibility for Pell grants and subsidized student loans for low-income students.

Starting with the FAFSA available for filing in October 2022, the number of questions will be reduced from 108 to 36, and they’ll be better aligned with information on federal tax returns. That means families will be able to use the IRS data-retrieval tool to answer more questions, which could save time and reduce errors.

Separately, the coronavirus relief bill extends a tax break that permits employers to contribute up to $5,250 a year, tax-free, to help pay off employees’ student loans. The provision was set to expire at the end of 2020.

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Only about 8% of employers currently offer this benefit, but up to one-fourth of large com­panies have said they would provide it if the payments are tax-free, according to the Society for Human Resource Management.

Sandra Block
Senior Editor, Kiplinger's Personal Finance

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.