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 FAFSA Simplification Act was passed to streamline the loan application, approval, and payment processes starting with the 2024-2025 cohort.
The law changed the Expected Family Contribution (EFC) portion of the application with a new Student Aid Index (SAI). This new formula modifies (among other factors) the relevancy of familial collegiate achievement and size from calculating a family’s ability to pay for college.
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 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 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 went wrong with the form?
The new form’s release was initially from October to December 2023, and the changes in the form’s latest release have resulted in slower processing times.
Anyone who works on the forms must now have their own FSA ID dispersed through studentaid.gov resulting in slower completion of FAFSA form. Moreover, Children of divorced parents must still have both parents listed as contributors as well as any step-parents which can complicate the FSA ID process.
In addition to overcomplicating how parents help students fill out their FAFSA, roughly 30% of forms have experienced processing errors, leaving students and families in the dark about their future.
How has this impacted students and families?
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?
The delayed rollout of FAFSA in combination with a myriad of other technical issues has resulted in a 27% decline in financial aid forms. The errors have also negatively impacted higher education as there has been a 10-15% decrease in college enrollment for the 2024-2025 school year.
Traditionally, universities and colleges 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 postpone their admission decisions.
This means that families will be left scrambling to find housing and financing, as well as to complete the necessary prerequisites prior to the Fall 2024 semester.
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.
The new FAFSA is flawed, but Education Secretary Miguel Cardonahas nevertheless encouraged 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.”
