The class of 2024 still doesn’t know what they’ll be paying for college this fall.
For many families, FAFSA is the saving grace when it comes to paying for college. Unfortunately, the latest rollout by the Department of Education has made a stressful process more difficult than necessary.
What is FAFSA?
In December, the Department of Education (DOE) rolled out a new form and submission process for the Free Application For Student Aid, commonly known as FAFSA. According to the Office of Student Aid, FAFSA is a free “form to apply for federal student aid such as federal grants, work-study funds, and loans.”
Such loans can be used to pay for college tuition, and living expenses, as well as used for trade school. Information used for FAFSA applications is also used by states and universities to determine if applicants are eligible for state and university aid.
Any monies distributed are subject to interest rates and – barring student loan forgiveness exemptions – must be repaid in full. The Office for Student Aid is clear that all student loans must be repaid in full regardless of employment status. “Your federal student loans can’t be canceled or forgiven because you didn’t get the education or job you expected or you didn’t complete your education.”
What are the recent changes to FAFSA?
The bungled rollout of the new process has led people to ask “What was changed and why?”
The FAFSA Simplification Act was passed to streamline the loan application, approval, and payment processes starting with the 2024-2025 cohort of college students. According to the DOE, the “law will also affect every state that uses FAFSA data to award state grant aid and every school that participates in the federal student aid programs.”
The law changed the Expected Family Contribution (EFC) portion of the application with a new Student Aid Index (SAI). This new formula removes the relevancy of familial collegiate achievement from calculating a family’s ability to pay for college. The SAI also creates separate eligibility for Pell Grant applicants.
The new rollout also modified family expectations stating that students should, “expect changes in how a student’s family size is determined aligning more with what was reported on the student’s/parents’ tax returns.”
The FAFSA Simplification Act also increased access to loans via the Pell Grant. The latest changes will affect incarcerated students, students whose previous institutions closed, and decidedly link eligibility to family size in connection to the federal poverty level.
The initial streamlining of the form was explained by the Department of Education.
“We use data received directly from the IRS to calculate Federal Pell Grant eligibility and the SAI. This data exchange has been made possible by the Fostering Undergraduate Talent by Unlocking Resources for Education Act (FUTURE Act), which we’ll implement alongside FAFSA simplification starting with the 2024–25 award year.”
“The FAFSA Simplification Act also removes questions about Selective Service registration and drug convictions. It also adds questions about applicants’ sex, race, and ethnicity, which have no effect on federal student aid eligibility (starting with the 2023–24 award year),” the department concluded.
What are the issues with the form?
Initially, the new form had a delayed release from October to December, and the subsequent changes in the form have resulted in delayed processing times.
Anyone who works on the forms must now have their own FSA ID dispersed through studentaid.gov. Children of divorced parents must still have both parents listed as contributors and any step-parents.
In addition to overcomplicating how parents help students fill out their FAFSA, roughly 30% of forms have experienced processing errors and glitches leaving students and families in the dark about their future.
The new formula is evidently flawed, but that hasn’t stopped Education Secretary Miguel Cardona from encouraging students, families, and universities to add to the systemic pile-up.
“I want all your students filling out FAFSA,” Cardona stated at a press conference. “It’s not just a new website. It’s a new formula. We’re expecting more dollars to go out, but they have to submit. The delays, in my opinion, once we get this thing going are … going to be worth it.”
How has this impacted students and families?
According to NerdWallet, “Parents no longer get a break for having multiple children in college at the same time.”
Families who use FAFSA as a means to try and receive aid for multiple college-age children will be facing penalties based on the new system. The new program has also miscalculated at least 1.5 million forms filed before March 21.
In addition to the total number of miscalculated forms, 20% of those forms have yet to be reviewed and reprocessed correctly.
Students and families who are still experiencing issues with their FAFSA applications can explore updates and workarounds here.
How has this impacted college enrollment?
Planning for college has also been impacted.
Traditionally, universities release their application decisions by May 1st. Since FAFSA is a huge part of the application process, some students have not been able to apply for the 2024-2025 school year on time, and some colleges have even had to delay their enrollment decisions.
This means that families will be left scrambling to find housing, and financing, as well as complete the necessary prerequisites to help their children feel comfortable and be enrolled properly in the Fall 2024 semester.
The delayed rollout of FAFSA in combination with a myriad of other technical issues has resulted in a 27% decline in financial aid forms, as well as a 10-15% decrease in college enrollment.
It is expected that the errors of the 2024-2025 FAFSA are likely to affect the 2025-2026 school year as well. The DOE typically releases a draft of the next FAFSA form by March-April, but with the issues and processing errors of the 2024 form, there has yet to be a draft submitted.
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