FAFSA simplification delays leave applicants, colleges on hold

A much-anticipated redesign of the Free Application for Federal Student Aid (FAFSA) has delayed the form’s release for this aid cycle, and the uncertainty is creating “headaches for everyone from financial aid officers to applicants,” Inside Higher Ed reports. Every year, more than 18 million students use the FAFSA to access billions of dollars in federal, state, and institutional aid.

First announced at the end of 2020 as part of an omnibus spending and stimulus package, the forthcoming, much shorter, FAFSA form is part of a larger FAFSA simplification effort. Those plans also include a new way to calculate student financial need—replacing the Expected Family Contribution (EFC) in the 2024-25 academic year with the Student Aid Index (SAI). Analyses from the State Higher Education Executive Officers Association (SHEEO) have projected that adoption of the SAI will expand the number of students eligible for Pell Grants and increase the amount of financial aid awarded to students from low-income households.

Colleges brace for a compressed aid cycle

Since 2016, the FAFSA form has been made available by October 1 each year. However, in February 2023, the Education Department cautioned that this year’s FAFSA would likely be delayed, and in March it announced that the redesigned FAFSA would be available to students in December instead. Officials have not yet set a release date, but Inside Higher Ed notes that, under federal law, it must be available by the new year.

Typically, this time of year, college financial aid teams host informational sessions on applying for financial aid, prepare to assemble financial aid packages, and consult with students on their forms. Ordinarily, more than half of high school seniors have completed the FAFSA by Dec. 15, according to Kim Cook, executive director of the nonprofit National College Attainment Network. “We know we have ground to make up,” she says.

Without a concrete launch date, colleges and counselors are in limbo. “We can’t be 100 percent ready,” Helen Faith, the financial aid director at the University of Wisconsin at Madison, told Inside Higher Ed. “We need the application.”

Everyone is “preparing for a hectic rollout” when it’s finally time to navigate a new form, communicate changes to applicants, and quickly assemble aid offers, Inside Higher Ed says. Technical difficulties, if they arise, could make the process even bumpier.

Students facing a shorter window to make decisions

Students, too, are likely to feel crunched, says David Hawkins, chief education and policy officer for the National Association for College Admission Counseling. Experts expect that students will receive their aid offers later, delaying their ability to compare packages and choose a college. That could have negative repercussions for lower-income students, who rely on financial aid visibility to understand whether they can afford college at all.

Edward Conroy, a senior advisor on the education policy team at the think tank New America, says he isn’t as worried about the implications for students attending top-tier universities and institutions with robust financial aid counseling as he is for students with access to fewer resources. “It’s the students going to the Cal States or regional publics who need to know, ‘Can I afford to go?’” he said. “Having to wait longer to apply for FAFSA and figure that out might mean they just don’t.”

The FAFSA delay also could throw off the process for early-decision and early-action applicants, who would typically receive aid packages by the end of the calendar year. Inside Higher Ed notes that some institutions have chosen to create their own forms to get earlier visibility into students’ financial needs, even though families will still be required to complete the FAFSA when available.

In addition, a number of private, highly selective institutions already use the College Board’s CSS Profile, another tool for calculating aid, minimizing the impact of the FAFSA delay. However, experts don’t expect many other institutions to adopt the CSS Profile for just one year. “Most schools I’ve talked to have said, ‘We’ll just try to manage through this year and get to next year,’” Brett Schraeder, managing director of financial aid optimization at education firm EAB, said.

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