FAFSA Issues Delay College Financial Aid Awards for 2024-25 School Year

The financial aid season for the 2024-25 academic year has proven challenging for college students and their families. The Free Application for Student Aid (FAF) underwent a redesign aimed at simplifying the process for families. However, the benefits of the new were overshadowed by a late launch and subsequent discovery of calculation errors in the form. This resulted in processing delays and, consequently, a postponement in the distribution of student financial aid packages for the academic year.

Students Impacted by FAFSA Delays

Both first-year and returning students have been impacted by these delays as the FAFSA is an annual requirement for federal financial aid eligibility. The situation is particularly stressful for incoming students who are awaiting their aid packages to compare offers from various colleges before the commonly observed May 1 college admissions deadline.

Slow Rollout of Simplified FAFSA

The FAFSA Simplification Act, a component of the Consolidated Appropriations Act of 2021, sanctioned a more efficient, shortened FAFSA. This revamped form, initially meant to be introduced with the 2023-24 FAFSA, was delayed by a year due to pandemic-related issues. The redesigned 2024-25 FAFSA, featuring nearly two-thirds fewer questions and a compulsory IRS direct data exchange tool for importing tax return information, was intended to ease the completion process. However, its public launch was delayed from the traditional October 1 date to December 31, 2023, due to the time required to incorporate new calculations and adjustments into the form.

Upon the form’s eventual late December release, a series of online problems impeded public access throughout January. Then, on January 30, the Education Department announced inflation-related adjustments to the aid calculation, potentially opening up an extra $1.8 billion in aid. However, this translated into further processing delays until March and postponed families’ receipt of aid awards from colleges.

On March 22, another error was discovered within the form that impacted the calculation of the student aid index for dependent students who reported assets. This necessitated yet another reprocessing round for all affected applications. The Department of Education continues to provide resources and information on studentaid.gov to assist families in completing the 2024-25 FAFSA.

Colleges Pressed for Time to Review FAFSA

In the midst of these issues, colleges and students are left in a bind. Colleges require time to review FAFSAs, estimate student aid eligibility, and assemble and communicate financial aid packages. As a result, high school seniors may find themselves having to commit to a college by the May 1 deadline without a clear understanding of their out-of-pocket costs.

It could be beneficial for families with high school seniors to reach out to individual colleges to inquire about expected aid packages and potential deadline extensions beyond May 1. Returning students might also want to contact their respective colleges regarding their aid package. Given the new FAFSA formula, returning students might find their aid eligibility, as gauged by their student aid index, has increased or decreased, thereby impacting their aid package.

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