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FAFSA changes boost Pell eligibility; regents' financial-aid offices report institutional aid rose in 2023—4
Summary
Regents heard that for fiscal 2023—4 institutional grant aid to students surpassed federal student-aid disbursements for the first time and that the new FAFSA—s student aid index (SAI) has increased the number of Pell-eligible filers in 2024—5.
The Board of Regents received an annual student financial aid report on Feb. 27 showing a shift in aid sources for Iowa—s public universities and widespread practical problems around the first year of the federal FAFSA redesign.
Board staff and campus directors from the University of Iowa, Iowa State and the University of Northern Iowa said institutional grants and scholarships outpaced direct federal aid in 2023—4 for the first time. Jason Pontius of the board office said institutions are offsetting declines in federal campus-based aid by increasing institutional and private support, while the state—s workforce grant program also grew.
Campus directors described operational impacts from the new FAFSA model and the student aid index (SAI). Chad Olsen at Iowa State said the 2024—5 FAFSA year was "lots of difficulties for students" and cited an example of a FAFSA that took months to complete in coordination with the Department of Education; he said the 2025—6 cycle has thus far been smoother. Tim Bakula of UNI and Brenda Bizitzky of Iowa described how the SAI and the new formula resulted in more Pell-eligible filings and also in instances where asset treatment (notably farm land and small-business assets) and elimination of the "multiple-in-college" family allowance produced unanticipated negative impacts for some families.
Bizitzky described a family with multiple sibling students and farm assets who were moved into a worse financial-aid position under the new FAFSA because family farming assets are now counted in certain ways and the household lost the previous multiple-in-college consideration. "We worked closely with the family, tried to help mitigate some of the drastic change," Bizitzky said, adding that staff are using professional judgment tools and other campus resources to reduce midstream disruptions.
Regent Chris Hensley urged board-level engagement with federal lawmakers and noted support for bills (sponsored by Sens. Chuck Grassley and Joni Ernst) to exempt family farms and small businesses from certain FAFSA asset reporting rules. Campus directors said they have raised issues with congressional offices and that national professional organizations are active on FAFSA implementation problems.
Why it matters: Changes to the FAFSA formula and to campus-based federal aid programs are shifting the mix of aid students receive and changing Pell eligibility; that affects affordability and institutional budgeting across Iowa—s public universities.
Provenance (excerpted): topic introduction: "Every year, the board office compiles a student financial aid report..." (Jason Pontius). topic finish: "Hearing none, our next meeting is scheduled for April 23 at Iowa State." (committee adjournment).
