Technical issues, delays and communication issues continue to plague the college financial aid application process this year.
The new FAFSA, or Free Application for Federal Student Aid, was supposed to be a boon to college-bound students, with fewer questions, a simpler form and a new formula for awarding aid. Instead, a long list of problems, including a murky release timeline last fall and numerous data problems this spring, have wreaked havoc on college admissions, frustrating families and financial aid offices alike.
“This really translates into a credibility crisis for the Department of Education,” said Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, said during a House subcommittee hearing Wednesday. “Today we find ourselves in a terrible situation,” he added later.
In a typical year, most students applying to a four-year college would have financial aid letters in hand by now, detailing what types of grants or scholarships they are eligible for and how much they must pay out of pocket (or with student loans). attend a particular school. This spring, however, many are empty-handed as financial aid officials scramble to condense months of work into weeks after repeated delays and errors by the Department of Education.
In a separate congressional hearing Wednesday, Education Secretary Miguel Cardona assured lawmakers that resolving FAFSA issues is the top priority for the department right now.
“We are working on this around the clock,” he said.
FAFSA completion rates dropped by 40%
The FAFSA redesign has been a long time coming. First approved in 2020, college-access advocates hoped a simpler process for applying for financial aid would improve what has been a notorious headache for families in the past. The idea was that if the FAFSA was easier to complete, more people would do it and, in turn, more students would be able to access the grants and scholarships they need to afford higher education and, finally, sign up.
But this year’s bungled launch appears to be having the opposite effect.
According to the National College Access Network (NCAN), the number of high school students completing a FAFSA is down 40% compared to last year. Part of the problem is that students who made mistakes on their applications still haven’t been able to fix them this year because the technology isn’t ready, so they haven’t been able to finish them. As many as 16% of students will need to make FAFSA corrections when that feature launches, which the department says is expected to happen next week.
However, even after adjusting for forms that need corrections before being included in the completion count, an alarming gap remains. To match last year’s final storage rate, more more than 1 million applications from high school students are still needed this year.
Bill DeBaun, senior director of data and strategic initiatives at NCAN, tells Money he suspects the main reason for the discrepancy is timing. The FAFSA rollout was delayed this year from October to January, meaning seniors had nearly 100 fewer days to get support and fill out the form.
“WWe’re running out of road,” DeBaun says, adding that while students are technically able to fill out the form over the summer, many will lose access to teachers and counselors who can help when school lets out.
Although FAFSA completion rates are declining across the country, the effects are more pronounced in some areas. High schools with larger shares of low-income and minority students are faring worse than their peers: California, Tennessee, Alabama and Mississippi have some of the largest year-over-year declines in the number of seniors finishing the FAFSA.
In California, in particular, many immigrant families had difficulty accessing the application due to a technical problem that prevented parents without Social Security numbers from filling out the form. (Students who are not U.S. citizens cannot use federal financial aid, but a parent’s citizenship has no bearing on the child’s eligibility.)
It’s hard to predict what might happen next fall, but the outlook now is bleak. Research has shown that seniors who complete a FAFSA are much more likely to enroll in college immediately. DeBaun says, therefore, it’s not out of the question that the nation could see a 4% to 5% drop in enrollment.
Most students are still waiting for financial aid letters
MAll universities have yet to send financial aid letters to accepted students, leaving families in a state of limbo.
This is partly due to the sheer volume of student documents received by colleges in recent weeks. Typically, colleges receive information on an ongoing basis as students complete the financial aid form. But this year, the Department of Education didn’t start sending student files until two and a half months after the application opened—in fact, staff received a combined 7 million FAFSAs in one small window instead of distribute them over time.
Hence the administrative crisis.
Another part of the blame lies in the still unresolved data issues in many applications. Last week, the department announced that nearly 20%, or about 1 million, of the forms processed so far this year contained “inconsistent” tax information from the IRS. In a separate incident announced in late March, the government miscalculated aid eligibility for about 200,000 dependent students who reported assets on their form.
Overall, the Department of Education says about 30% of FAFSA forms filed so far may be affected by processing or data errors. At some universities, however, the percentage may be even higher.
Rachelle Feldman, vice provost for enrollment at the University of North Carolina at Chapel Hill, told lawmakers Wednesday that the university has received only 60% of the submissions it usually has this time of year. Additionally, 48% of student documents on file at the university were flagged for reprocessing due to data or calculation errors.
“We feel like we’re flying blind with no clear path, and we still haven’t issued a single offer of help,” he said. This is a huge amount for a top-tier college that admits more than 9,000 freshmen a year.
Sixteen percent of colleges said in a survey this week that they had already sent financial aid packages to students. But about 20% of colleges said they plan to send offers only to students who aren’t affected by data issues before May 1, while 14% said they don’t expect to be able to send offers. Anyone award letters before next month.
Schools are postponing commitment deadlines
As the problems keep coming, hundreds of schools have pushed back their typical admissions timeline.
In a normal year, students who apply during the regular admissions cycle will receive theirs financial aid offers during the period in which they receive letters of acceptance. Then, they would have at least a month – but often more – to do the math and decide whether to enroll in a specific college.
This time period is crucial for many families. In many cases, it’s the first time they have reliable, personalized information about how much it will actually cost to attend college, and they sometimes compare aid offers from more than one school to see which is most affordable.
After issuing financial aid letters, colleges often have a May 1 deadline in which they ask applicants to respond to an offer of admission. So far this year, more than 260 universities, or about 55% of institutions, have postponed that deadline, according to a study list from the National Association for College Admissions Counseling. Most of these colleges have pushed back the date to June 1, but some have deadlines as late as August. (Another 16% of colleges have not officially changed the deadline, but said they are offering extensions on a case-by-case basis.)
The problem is that students may receive acceptances from colleges that have different deadlines, says Shannon Vasconcelos, a college financial advisor at Bright Horizons. This complicates matters for families who are considering whether to put a deposit at a school that met the May 1 deadline when they are still waiting to receive financial aid information from other colleges.
It’s bad enough that students still haven’t gotten concrete answers about financial aid, he says. But now that they face inconsistent filing deadlines, “it’s just adding this new stress and pressure on families.”
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