FAFSA delays are straining families and colleges

For college hopefuls, cost is often the deciding factor on whether – and where – to go to school. For more than 17 million students, the Free Application for Federal Student Aid (FAFSA) is the key to unlocking government dollars to help cover that cost. But this year's FAFSA has been beset by delays and confusion, and the recent "soft launch" of the form has bedeviled families and experts alike.

"It's been challenging," says Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, or NASFAA. "That's the word we've been using over and over again, so I'm going to stick with it. It's been a challenging couple of days for students and families who have been waiting for the FAFSA to open later than they've normally waited."

The FAFSA is normally released on Oct. 1, but this year's form arrived three months late, on Dec. 30. In the days since, the form has only been available on a limited basis, what the U.S. Education Department is calling a "soft launch."

A department spokesperson says the form was available on Dec. 30 and 31 for half an hour each day, and for two hours on Monday, Jan. 1. Since Wednesday, the form has been open from 8am-8pm EST, and the department plans for the form to be live those same hours on Friday. Still, applicants who have gone online during these times weren't guaranteed access to the form. The department is using an online waiting room to manage capacity.

According to the spokesperson, this soft launch period allows the department to monitor site performance and make updates to the form to create a better FAFSA experience. The department did not specify how long the soft launch period would last.

Over 500,000 FAFSA applications have successfully been submitted as of Thursday evening, according to the department.

What the delay and soft launch means for families

In the past, the traditional October FAFSA release has given families ample time to apply for aid, and it's also given colleges time to review students' financials and decide how much each family should be asked to pay.

"Somewhere between November through January, a traditional school would start preparing and sending out their aid offers," Draeger says.

This year's delayed FAFSA release has put a tighter timeline on that process.

"So all of the process that was built into a previous year is now condensed, condensed significantly," Draeger adds. "We don't know how significantly because we don't have a firm date from the Department of Education of when schools will receive the applicant data."

The department says it will be sending FAFSA eligibility information to colleges in late January, but it hasn't given a date.

The delays have put an enormous strain on schools to compress their traditional financial aid process by months, not just weeks, Draeger says. It's also making it difficult for students and families to commit to a college when they don't yet know what the price tag will be.

Why the delay

About three years ago, Congress mandated that the FAFSA be simplified. But that streamlining has taken time, and it's come at a moment when the Education Department is also helping 28 million student loan borrowers return to repayment, and navigating its own funding crisis.

Hence the three-month FAFSA delay. The new form has fewer questions and it allows families to import financial data directly from the IRS.

"It was really clear cut, user friendly, simple, not as tedious as the previous application was," says Vanessa McGee, a college and career readiness coordinator at Manchester High School in Manchester, Conn. She and a student were able to gain access to the new FAFSA on Tuesday.

"We did have some bugs with the website refreshing. She did submit and sign a few times and it didn't take. So there were some little glitches."

Still, McGee says the new FAFSA is an improvement.

"It's so user friendly now that anyone should be able to do it. The students can sit down with their parents. The students can do it on their own. I think it simplifies everything, and I'm hoping that that makes it easier."

The new form should also vastly expand who qualifies for a Pell grant – that's money for lower-income students, as much as $7,395 in 2023, that does not have to be repaid.

According to the department, the new FAFSA will help 610,000 more students receive Pell for the first time and allow 1.5 million more students to get the maximum Pell grant, bringing the total number of students eligible for maximum Pell to more than 5.2 million.

But not all of Congress' intended changes have made it into this year's form. Lawmakers had instructed the Education Department to adjust for inflation when calculating how much of a student's or family's income should be used to decide financial aid eligibility. But that adjustment didn't happen.

"That would have protected more income and thereby lowered the ... amount that families would have had to contribute to their educations," says Draeger of NASFAA.

Technically, this failure to make the inflation adjustment runs afoul of the law. When asked for comment, a department spokesperson told NPR the department is still assessing the problem.

It's unclear, given the problems with the FAFSA rollout so far, when or how the Education Department will be able to correct this mistake – a failure that, until they do, could cost many families dearly.

Reporting contributed by: Lauren MigakiEdited by: Steve Drummond [Copyright 2024 NPR]