Applicants, colleges on hold as FAFSA frustrations continue

Across the country, high school seniors are receiving their college acceptance letters, but for many, their financial aid packages are trailing far behind, complicating decisions about whether and where to enroll. This year’s financial aid cycle has proven tumultuous, with a cascade of delays following the late release of the new, streamlined Free Application for Federal Student Aid (FAFSA). Colleges and universities that rely on the FAFSA to determine aid for admitted students have been left waiting on crucial data from the Department of Education, prompting them to consider how they can best support students and to adjust admissions deadlines so applicants have time to make informed decisions about where to attend. 

Although the latest formula used to calculate student aid is expected to provide more generous aid for low-income households, the new FAFSA’s delays and technical difficulties may have an outsized impact on low-income students and those from historically underrepresented backgrounds, who typically face significant financial barriers to higher education.

Advocates fear these students might opt out of college altogether if they hit too many roadblocks in submitting their forms or face delays in receiving financial aid packages. As of March 22, over 1.4 million high school seniors had submitted a FAFSA, almost 29% fewer than the last academic year, according to a National College Attainment Network tracker.

Ongoing setbacks

Issues have plagued the new FAFSA since its release on Dec. 30, 2023, three months later than it is usually available to students and families. The latest setback came this week when the Department of Education announced that over 330,000 financial aid applications (or 5% of the over 6.6 million FAFSAs submitted as of the April 1 announcement) will have to be corrected following a tax data error that made students eligible for less aid than they should receive, Higher Ed Dive reports. An additional 10% of applications were affected by errors that would result in too much aid.

The new FAFSA imports information directly from the IRS, which was meant to make the financial aid process easier for applicants. However, the Education Department found errors in some of that imported data and is working with the IRS to resolve the issue. The department will reprocess those applications in the first half of April, but only if corrections will lead to students receiving more aid. The applications that granted too much aid would not be corrected unless prompted by colleges.

Financial aid officers, meanwhile, are wondering what other hiccups lie ahead, given the new FAFSA’s technical difficulties, The Washington Post reports. In past years, students have been able to amend their FAFSAs as soon as errors are found, but this year, applicants will have to wait until the first half of April to make adjustments, according to a March announcement from the Department of Education. 

Mitigating the impact

While these errors and others are corrected, the Education Department called on governors to extend their state financial aid timelines and encourage colleges to push back commitment deadlines, The Hill reports. California, Maryland, and Tennessee are among the states that have already extended their financial aid deadlines through at least early May, according to Higher Ed Dive.

Some schools, including large public universities like the University of North Carolina at Greensboro and Georgia Tech, already pushed back the traditional commitment and deposit deadlines ranging following the Department of Education’s February announcement about delays in submitting student aid information to colleges, Inside Higher Ed reports.

“The result,” Inside Higher Ed writes, “is a grab-bag of commitment dates that even the most well-organized student would struggle to keep straight without a spreadsheet.”

Giving students more time may further backfire if students are still working through the financial aid process into the summer following high-school graduation, when applicants likely have limited access to their high school counselors, Inside Higher Ed reports.

Communicating with students

Higher education institutions that enroll large numbers of low-income students and have smaller endowments to provide institutional aid may be disproportionately affected by these delays. Over 75% of students enrolled at Historically Black Colleges and Universities (HBCUs) receive Federal Pell Grants, which provide need-based financial aid for undergraduates from low-income households. Several HBCUs are using a resource from National Association of Student Financial Aid Administrators (NASFAA) to estimate students’ financial need while they wait for the Education Department to submit financial aid information, The Chronicle of Higher Education says. 

The Education Department is also sending additional support to HBCUs and other Minority-Serving-Institutions as they deal with FAFSA delays. Some schools, meanwhile, are creating their own strategies to communicate with students about changes and delays through emails, campus announcements, websites, and texts, according to the Chronicle.

“The financial aid and enrollment process is already a complex process, so this here is going to add another layer of complexity,” says Gavin R. Hamms, associate vice president for enrollment management at Grambling State University, an HBCU in Louisiana. “We want to make sure we communicate, with visuals, infographics, to educate the students that this is what’s happening and just how we’re going to work with you to solve this issue.”

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