NAICU Washington Update

FAFSA Simplification Act Implementation Delayed

June 17, 2021

The office of Federal Student Aid (FSA) announced that certain elements of the Free Application for Federal Student Aid (FAFSA) Simplification Act of 2020, which was expected to be fully implemented by July 1, 2023, will face a delay, pushing full implementation to as late as the 2024-2025academic year. 

As NAICU reported previously, the FAFSA Simplification Act is really a rewrite of the need analysis system used to determine eligibility and distribution of federal student aid, and thus a mini-reauthorization of the Higher Education Act (HEA). 

In academic year (AY) 2021-2022, FSA is planning to implement the repeal of the Subsidized Usage Limit Applies (SULA) requirements that only allow students to benefit from subsidized loans for six total years, or 150% of the length of the borrower’s educational program. To prepare for the repeal of SULA, the Department of Education issued final regulations to reflect this change. 

Beginning in AY 2021-2022, and spanning across AY 2023-2024, FSA is planning to implement the removal of any negative consequences for borrowers who have had a drug conviction, and respond affirmatively to question 23 on the FAFSA, and the removal of the requirement that male students must register with the Selective Service System to receive federal student aid.

During the period June 26–27, 2021, the functionality of the Common Origination and Disbursement (COD) System will be updated to support aspects of the implementation of the FAFSA Simplification Act. Total changes to the COD system will affect the campus-based programs, the Return to Title IV process, the processing of the federal Pell Grant, the Iraq and Afghanistan Service Grant, the Teacher Education Assistance for College and Higher Education (TEACH) Grant, and the William D. Ford Federal Direct Loan awards for the 2021–22 award year.

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