US Department of Education supports colleges and students amid FAFSA delays

High school seniors are making decisions about college without knowing how much aid they will receive. (iStock)

The U.S. Department of Education is stepping in to help colleges process forms faster after the fix to the new Free Application for Federal Student Aid (FAFSA) form threatened to delay the timeline for awards.

More than 4 million FAFSA applications have been submitted since the new form was launched on Dec. 30. However, student aid calculations for the latest forms were based on three-year-old tables that did not accurately reflect the current high inflation environment. The FAFSA Simplification Act passed by Congress in 2020 included a provision requiring the Education Department to update tables used in the Student Aid Index (SAI) calculation to account for inflation and other economic changes. The mistake meant students would miss out on nearly $2 billion in financial aid.

At the end of January, the Department said it planned to fix the problem in time for this year's awards. However, the correction threatened to delay financial aid offers until at least April and possibly as late as May or June for high school seniors, according to higher education expert Mark Kantrowitz.  

The department has promised to implement steps to help colleges process student records faster and more efficiently when they first arrive in March by considerably reducing verification requirements, suspending routine school compliance reviews, and providing flexibility on procedures for renewing participation in the federal student aid programs.

"We are determined to drive a constant drumbeat of action to fulfill the transformational potential of the Better FAFSA," U.S. Secretary of Education Miguel Cardona said. "The steps we're announcing today build on the Better FAFSA College Support Strategy by making it easier for colleges and universities to get financial aid packages to students and families as quickly as possible. We will strive to leave no stone unturned to make this FAFSA process easier and simpler for colleges, universities, and students."

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Test versions of the FAFSA will be delivered soon

The department also announced that it would release test versions of Institutional Student Information Records (ISIRs), which list the FAFSA data for students applying to a respective school, by Feb.16. 

The information is critical for colleges to efficiently prepare their processes to assemble aid packages. This gets the ball rolling on the process as schools await to receive FAFSA information in the first half of March. College financial aid administrators had initially been promised the data by the end of January.

"Schools have been told to expect test records by the end of this week, and processed FAFSA information in the first half of March, which will be vital to provide students and families with need-based financial aid information this spring," The National Association of Student Financial Aid Administrators (NASFAA) President and CEO Justin Draeger said in a statement. "Students and families cannot afford any additional delays."

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New form expands access to aid

The 2024-25 FAFSA form expands eligibility for federal student aid, including Pell Grants, and provides a streamlined user experience, according to the department. 

Some 610,000 new students from low-income backgrounds will be eligible to receive Federal Pell Grants due to updates to student aid calculations. An additional 1.5 million more students will be able to access the maximum Pell Grant award, bringing the total number of students eligible for the maximum Pell Grant to over 5.2 million.

The new application also reduces questions to roughly 40 from 100. Applicants will also be able to skip as many as 26 questions, depending on their circumstances.  

"Students, parents and families continue to share with us how easy and fast it is to complete and submit the 2024-25 FAFSA form," Federal Student Aid Chief Richard Cordray said in a statement. "We remain committed to ensuring students and families have stable and secure access to more than $114 billion in federal financial aid. We know how crucial this support is to pursue higher education, particularly for the most underserved communities, and the positive ripple effects an education beyond high school makes in the lives of millions, their communities and the country." 

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