The hot mess that is the Department of Education’s new Free Application for Federal Financial Aid continues to spit out errors and delays, creating headaches for anxious students and families. In response, many colleges and universities are extending their commitment deadlines this spring for accepted students.
Rolled out last fall, the simplified FAFSA was designed to ease a notoriously difficult application process for families seeking federal financial aid for their college-bound children. “It is faster and easier to fill out, with most students and families completing it in less than 15 minutes,” the Department of Education trumpeted at the time. The FAFSA experience has been anything but fast and easy.
The new online application opened nearly three months later than usual and initially was available only intermittently, according to Allie Arcese, director of communications for the National Association of Student Financial Aid Administrators. Once it became available 24/7, issues prevented some applicants from starting or completing it.
The Department of Education has encountered significant delays in sending applicant financial information to colleges and universities. “In a normal year, this typically happens 1-3 days after a student completes the FAFSA,” Arcese told Rethinking65 on April 2. “However, schools only started receiving applicant information (referred to as Institutional Student Information Records, or ISIRs) about two weeks ago.”
Litany of FAFSA Glitches Continues
New problems continue to crop up as the Department sends the severely delayed financial data to schools. Among the latest, on March 13 the New York Times reported that department staffers discovered 70,000 overlooked student emails with essential data. On March 22, the DOE’s Federal Student Aid office notified schools that some key student financial information was missing from ISIRs sent to schools before March 21. And on April 1, the office reported problems with tax data on ISIRs.
“The FAFSA has been a miserable failure,” says Mark Kantrowitz, an expert on student financial aid, scholarships and student loans. He notes that the redesign was intended to eliminate FAFSA as a barrier to college access.
“But the botched rollout has done the opposite. There are more than 2 million fewer FAFSAs filed now as compared with the same time last year. This has been a frustrating, impossible process for students, their families and the colleges. There have been numerous missed deadlines, long delays, clogged call centers and implementation errors,” Kantrowitz says.
The need for federal financial assistance has grown more acute as college tuition continues to increase. The publication Inside Higher Ed notes that the cost of attending some top private schools is moving toward $100,000 per year, with Vanderbilt University leading the way with a $98,426 estimated total cost for some students.
Department of Education Request to Colleges and Universities
Kantrowitz says one of the latest FAFSA glitches, incomplete financial information on ISIRs sent to schools, affects about 200,000 students. In a March 22 advisory, the Department of Education reported that the FAFSA system omitted student current net worth of investments and total of cash, savings and checking accounts. This resulted in an inaccurate Student Aid Index for applicants — an eligibility number that financial aid offices use to determine how much aid an applicant would get if they attend the school. Even so, the Department urged schools to proceed with processing those students’ applications using estimates.
NASFAA President and CEO Justin Draeger rejected the Department’s call to process the flawed applications. “This is another unforced error that will likely cause more processing delays for students,” Draeger says. “It is not feasible or realistic to send out incorrect FAFSA data and ask thousands of schools to make real-time calculations and adjustments to the federal formula on the school side.”
Kantrowitz agrees. “Since 20% of a dependent students assets contribute to the Student Aid Index (SAI), this is a serious error,” he says. “The U.S. Department of Education’s workaround is to have the colleges calculate the SAI manually for these students. But the colleges are overwhelmed by a compressed schedule for preparing financial aid awards, a process that would have been complete by early March in previous years.”
Advisor Counsels Families to do Their Own Aid Calculations
“For many families, these delays are causing confusion and alarm because they are trying to figure out how to pay for college AFTER they get the SAI calculation and the subsequent Award Letters from the colleges,” says Beth Walker, a wealth advisor with Carson Wealth in Colorado Springs, Colo., who specializes in college advice.
“This points out the flawed approach we’ve conditioned families to use when it comes to college,” she says. “It shouldn’t matter what the colleges or the Department of Education say they can pay. The plan should be predicated on how much the family can afford and then reverse engineered.”
Walker says her approach — calculating likely aid beforehand — is paying off for her clients. “The families I serve are feeling inconvenienced but NOT stressed,” she says. “They know what to expect from the colleges once the forms have been filed and processed. They are not waiting to hear what the colleges have to offer because we’ve done the work to know the probable aid package the student will receive from each school.”
Colleges Extend Deadlines Past May 1
Kantrowitz says there’s some good news: Many colleges are pushing back their admissions acceptance deadlines from the traditional May 1 date — commonly referred to as College Decision Day — to accommodate applicant corrections to FAFSA data, delayed delivery of financial aid offers, and appeals.
The National Association for College Admission Counseling (NACAC) has published a directory of enrollment deadline changes for member schools. As of April 2, among 462 schools reporting, 25 said they are not extending their deadline past May 1; 78 are making extensions on a case-by-case basis, 37 are undecided, and 246 are extending their deadlines. Among the last group, 53 are extending the deadline to May 15, 149 are going to June 1, and 44 are going later than June 1.
Kantrowitz says a handful of colleges also use another application, the CSS Profile form, for non-federal institutional financial aid, and have already provided estimated aid offers based on the form’s data. “Some of these aren’t changing the May 1 deadline, perhaps hoping to get an admissions advantage as a result,” he says.
Asked if students still have time to find scholarships, Kantrowitz notes that there’s a difference between institutional grants and private scholarships. The awarding of institutional aid depends on the FAFSA or CSS Profile forms, he says. Private scholarships have deadlines throughout the year, including some with deadlines in the spring and summer.
To find private scholarships, students can use a free scholarship matching service, such as Fastweb.com or the College Board’s Big Future, he says.
FAFSA Woes Affect Federal Aid
However, Kantrowitz said in a blog post last month that the FAFSA problems are reducing the number of applications, which he predicted will reduce the number of federal Pell grants that will be awarded. “If this trend continues, by the end of August 2024, the number of FAFSAs submitted will be 3.7 million lower than the number submitted by the end of August 2016,” Kantrowitz wrote. “The decrease in the overall number of FAFSAs submitted suggests that the number of Federal Pell Grant recipients will be about the same as last year, despite the new Federal Pell Grant formula making it easier for students to qualify for the grant.”
Arcese, of NASFAA, says federal government grants have been trending down in recent years while institutional aid has steadily made up a larger portion of undergraduate aid.
“In 2022-23, for example, institutional aid made up 53% of all grant aid given to undergraduates. Just 10 years ago, in 2012-13, institutional grant aid made up 40% of all undergraduate grant aid, according to the College Board,” she says.
College Board data shows that in 2002-03 federal grants totaled $23.4 billion, or 32% of all aid, increasing steadily to $63.5 billion, or 44%, in 2010-11, and then decreasing to $37.7 billion, or 26%, in 2022-23.
In contrast, institutional aid was $28.7 billion, or 39% of total aid in 2002-03, and has increased steadily to $76.9 billion — more than double the federal total — or 53% of total aid, according to the College Board.
Waitlisted Students Face New Challenges
The FAFSA-caused delays in the college acceptance process are affecting college waitlists, Kantrowitz says. Schools already have been waitlisting more students because of uncertainty in the aftermath of the U.S. Supreme Court’s decision overturning affirmative action, he says.
“The FAFSA fiasco only makes this situation worse,” he says. “Moreover, with the disruption to the financial aid timeline, families will be choosing a college later, which may cause delays in colleges accepting students off of the waitlist.”
Because colleges now have different acceptance timelines, students may learn that they are accepted off of college waitlists at different times, Kantrowitz says. Some colleges may give a student just 24 hours to accept an offer of admission, forcing them to accept before hearing from other colleges, he says.
Students may have to put deposits down on two or more colleges to give themselves more flexibility, he added. “This may cause summer melt to increase,” he says, referring to accepted students who plan but fail to enroll, “disrupting the colleges’ planning.”
In a four-decade career in journalism, Ed Prince has served as an editor with many of New Jersey’s leading newspapers, including the Star-Ledger, Asbury Park Press and Home News Tribune.
