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.
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