FAFSA Application 2024 Changes: What are the New Rules?

fafsa changes

FAFSA Application 2024 Changes: Several upgrades have been made to the 529 education savings plan for 2024 that will help you save for college and pay for it.

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Congress authorized this new implementation to roll over $35,000 in left over savings into Roth individual retirement accounts tax-free.

It eliminates the fear that money not being used might remain trapped or incur taxes for the rest of its life.

Taking a closer look at the Free Application for Federal Student Aid (FAFSA), the Department of Education created the so-called grandparent loophole by December.

Using a 529 plan allows grandparents to fund a grandchild’s education without affecting the student’s financial aid eligibility.

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How do the new rules work?

Each year, Congress passes new acts that can add or eliminate these loopholes.

As a result of the FAFSA Simplification Act, the ‘grandparent loophole’ has an important distinction that should be noted.

As the name suggests, anyone who isn’t a parent can use it. This is a way for students to lower the cost of education through the help of their relatives, friends, or grandparents.

As a result of this act, questions related to selective service registration and drug convictions have been removed.

Beginning with the 2023-24 award year, there will also be questions about applicants’ sex, race, and ethnicity.

In the grandparent loophole, you can contribute the most amount, get tax-free growth and withdrawals, and even receive some in-state tax advantages.

Also Read: FAFSA Income Limits 2024: How is it Calculated and FAFSA income limit this year