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The FAFSA Fiasco: What Went Wrong and What It Means for Students

Jun 19, 2024

The rollout of the 2024-2025 Free Application for Federal Student Aid (FAFSA) has been plagued by delays and technical issues, causing significant stress and uncertainty for millions of students and families. Each year, around 17 million students complete the FAFSA to receive federal aid to help pay for college. But the fallout from the FAFSA issues had an immediate impact, with the National College Attainment Network reporting that application completion rates among high school seniors were down by as much as 40% as recently as the end of March 2024.

While those numbers are improving as institutions and the Department of Education scramble to get things in order for the 2024-25 school year, it’s important to understand what has happened and what you and your student need to do going forward.

Background of the Fiasco

The FAFSA Simplification Act, passed in December 2020, aimed to streamline the FAFSA process, making it easier for students to apply for financial aid. The U.S. Department of Education, tasked with implementing these changes, decided to overhaul the FAFSA’s outdated system, replacing it with a new cloud-based infrastructure. This ambitious project led to numerous complications, delays, and overall confusion for students as well as colleges and universities.

The new system was intended to be a more efficient, modern replacement for the decades-old processing system. However, the transition has been anything but smooth. Earlier this year, technical problems emerged, including issues with the new Student Aid Index (SAI) calculations, leading to incorrect financial aid estimates for thousands of students. This forced many institutions to manually recalculate aid packages, further delaying the process according to Inside Higher Ed.

Impact on Students

The FAFSA fiasco has significantly impacted students in several critical ways:

1. Delays and Uncertainty

Students experienced substantial delays in the processing of their FAFSA applications. As mentioned above, technical glitches led to incorrect financial aid calculations and delayed aid packages, creating a stressful environment particularly for those students who rely heavily on financial aid to attend college. Of course, returning students have also been impacted since all students must complete the FAFSA each year to receive federal aid.

2. Decreased FAFSA Completion Rates

While the snags have slowly been ironed out in the process, there is no denying that the complications with the new FAFSA system have led to that noticeable decline in the completion rates, with Inside Higher Ed estimating the year-over-year completion rate now down about 29%. Though that mid-April figure indicates a sluggish improvement over early statistics in this year’s cycle, the decline is worrying because it could lead to lower college enrollment rates, especially among low-income and first-generation students.

3. Impact on College Decisions

The noted delays and errors have created uncertainty for students making decisions about college. Financial aid packages are crucial in determining whether a student can afford to attend a particular college, so any delays in receiving these packages can force students to make uninformed decisions or miss out on opportunities.

4. Strain on Financial Aid Offices

Colleges and universities, at the same time, have had to deal with the fallout from the FAFSA issues, including recalculating aid manually and dealing with frustrated students and families. This additional burden has strained resources, created operational challenges for financial aid offices, and also triggered a ripple effect for colleges and universities now grappling with expected drops in enrollment for the fall 2024 semester.

5. Psychological Stress

The ongoing issues with the FAFSA have caused significant mental stress for students and their families. Understandably so. For many, there is a level of uncertainty about whether they will receive financial aid in time for the next academic year, an immense and initially unexpected source of stress during a period of big decisions and choices.

What You Can Do Now

First of all, understand that you are not alone. You and your student are going through this tough situation alongside so many other families. Feeling stressed, anxious, and worried is a perfectly normal reaction regarding your student and their financial future.

Given the ongoing issues with the FAFSA system, you and your student should take several proactive steps to navigate the challenges and ensure your family receives the financial aid you need.

1. Stay Informed

Keep up with the latest updates from the U.S. Department of Education. Regularly checking official communications for any announcements or changes regarding FAFSA processing can help reduce some of the stress and avert any jarring surprises.

2. Contact Financial Aid Offices

If you encounter issues with your FAFSA application, reach out to your school’s financial aid office immediately. They can provide guidance on how to proceed and may be able to help you with manual recalculations of your aid package if necessary.

3. Double-Check Your Application

Carefully review your student’s FAFSA application before they submit to avoid common errors. If you realize your student has made a mistake after submission, help them make corrections as soon as possible when the correction option becomes available.

4. Document Everything

Keep detailed records of your student’s FAFSA submission, any communications with the Department of Education or your student’s financial aid office, and any issues your student encounters. This documentation can be crucial if you need to dispute an error or seek further assistance.

5. Seek Help from Financial Aid Experts

Consider seeking advice from financial aid experts or consultants who can help you navigate the complexities of the application process.

6. Explore Alternative Funding Sources

While waiting out continued FAFSA delays, explore other funding sources such as scholarships, grants, and private loans. Many organizations offer scholarships based on various merit- or talent-based based criteria, and these can not only be a valuable supplement to federal aid but a welcome source of potentially known aid while the FAFSA process plays out.

7. Advocate for Your Student

If your student is facing significant delays or issues, don’t hesitate to advocate for them. This could involve contacting your congressional representative to make them aware of the impact these delays are having on your education and financial situation.

8. Plan for Contingencies

Given the uncertainties, have a backup plan in case your student’s aid package is delayed or does not cover all your needs. This might include adjusting your student’s college plans temporarily or reducing expenses. Perhaps your student considers taking community college courses and living at home for a semester and then transferring to their desired college or university.

9. Monitor Correction Windows

Be vigilant about the windows for making corrections to your student’s FAFSA. If errors are found in your student’s initial submission, corrections will be crucial to ensuring your student receives the correct amount of aid. Watch for notifications from the Department of Education regarding when these correction windows are open.

The Final Word

By staying informed, proactive, and persistent, you and your student can better navigate the challenges posed by the FAFSA issues and still secure the financial aid they need to pursue their education. While the 2024-25 FAFSA has not gone as planned, we remain hopeful that all students can be able to pursue their dreams of a college education.