Can an Unborn Child Count In Family Size Starting With the 2024-25 Award Year?

Award Year: 2024-25 KA-36567 Helpfulness Rating 3,890 page views

This guidance is specific to the 2024-25 award year and later.

No. Beginning with the 2024-25 award year, family size (formerly household size) is now based on federal tax information (FTI) transferred directly from the IRS to the FAFSA via the FUTURE Act Direct Data Exchange (FA-DDX). This means the number of dependents in the family size is now based on the number of individuals who are claimed as dependents on either the applicant’s (if independent) or parent’s (if dependent) U.S. federal tax return. As such, an unborn child cannot be included in family size unless and until the child is born. For more information about who can be claimed as a dependent on a federal tax return, see the IRS document Overview of the Rules for Claiming a Dependent.

If FTI is pulled in, the FAFSA contributor (applicant and/or parent) is given the opportunity to manually update the family size if it has changed since filing the applicable tax return. However, the contributor cannot see what family size was reported from the FA-DDX, as the transferred FTI is masked.

When the FAFSA contributor manually enters the family size, they are instructed as follows:

NASFAA has confirmed with the U.S. Department of Education (ED) that the financial aid administrator (FAA) cannot include the unborn child in family size using professional judgment (PJ). That is, the FAA cannot use PJ to circumvent the statute. Otherwise, FAAs have the authority to use PJ to make other adjustments on a case-by-case basis, as long as the FAA feels it is warranted and it is well-documented in the student's file.

While the unborn child cannot be included in family size, a newborn child can be included in family size, either as an update if certain conditions are met or as a PJ adjustment depending on whether certain conditions are met.

Updating to Include the Newborn Child: The rules for updating FAFSA data under 34 CFR 668.55 have not changed, however. When the child is born, the contributor or FAA can update family size in certain circumstances. If the addition of the newborn child changes the student’s dependency status, then dependency status and family size must be updated under 668.55(a). Otherwise, as a general rule under 668.55(b), family size can only be updated to include the newborn child if the student is selected for verification by the FAFSA Processing System (FPS, formerly Central Processing System) or the institution. Family size then must be updated to be correct at the time of verification (unless that update is due to a change in the student’s marital status). Even then, that newborn child can only be included if the child could be claimed as a dependent on the contributor's tax return.

Adjusting to Include the Newborn Child: If an update is not allowed as detailed above, the only way the newborn child may be added to the family size is through a PJ adjustment. As always, the FAA determines if a PJ adjustment is warranted based on the student's (or contributor's) documented special circumstances, and the PJ must be made on a case-by-case basis. Having a newborn child is not a special circumstance by itself, so there have to be other special circumstances beyond just having a newborn child in order to make the PJ adjustment. In other words, you cannot make the same PJ adjustment for an entire group of students--there have to be special circumstances that differentiate the student from others in the same situation. And, the PJ adjustment can be made after verification is completed.

The above guidance also applies to paper FAFSA filers and online FAFSA filers whose FTI cannot be transferred into the FAFSA.

Reference the FAFSA Simplification changes under Section 480(k) of the Higher Education Act of 1965 (HEA), as amended [20 USC 1087vv(k)(1) Amendment of Section].

Terminology matters! See AskRegs Knowledgebase Q&A, What's the Difference Between a Correction, an Update, and a PJ Adjustment? 

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