Navigating Recent FAFSA Changes: What Students Need to Know
This article has been updated with the latest information regarding the FAFSA and 2024-2025 financial aid timeline.
As college students and their families eagerly await their financial aid offers, issues with the process began with the delayed release of this year’s Free Application for Federal Student Aid (FAFSA). (The FAFSA is typically released in October but was not available until late December 2023.) Now, a series of errors may impact the amount of federal financial aid students receive and cause additional headaches and delays.
The Inflation Adjustment Dilemma
The changes to this year’s FAFSA sought to extend Pell Grants and financial aid to more students, but an error that did not account for inflation meant students who would otherwise receive the Pell Grant could be deemed ineligible or receive less aid. The Washington Post first reported the error and outlined the possible repercussions in December.
In late January, a spokesperson for the U.S. Department of Education said the inflation mistake would be fixed in time for the 2024-2025 academic year. This adjustment, mandated by Congress, aims to ensure that students receive the intended levels of federal aid.
However, in February, the Department of Education said colleges would not receive FAFSA data until the first half of March, which could significantly delay financial aid offers to students. College financial aid offices are unable to determine how much financial aid students should receive until they receive the FAFSA data.
Additional Processing Errors
As the inflation mistake was adjusted and attempts were made to fast-track information to colleges, mistakes prevailed. On April 9, the U.S. Department of Education said that approximately 30% of FAFSA forms have potentially been affected by processing or data errors. About one-third of those will require reprocessing through the FAFSA Processing System (FPS). The remaining two-thirds require corrected tax information from the IRS.
The Department expects most of these reprocessed results will reduce student aid eligibility, but schools and states can exercise their judgment if the reprocessed information does not result in greater financial aid eligibility for students.
What does this mean for students and families? Potentially more waiting and wondering. The Department expects that schools can move forward with aid offers for over 80% of previously submitted FAFSAs. For the remainder, schools will be notified which individuals were affected and given information about how to proceed.
Navigating the Process
College students and their families should keep a close eye on developments. Here are a few steps to consider:
- Stay Updated: Pay attention to official communications from your college’s financial aid office and the Department of Education. They will provide updates on any potential changes to the FAFSA process.
- Seek Guidance: Reach out to your college’s financial aid office or counselors for guidance and support. They can help answer specific questions and provide assistance in navigating the financial aid process.
- Explore Alternative Options: While waiting for official aid offers, explore other sources of financial assistance, such as scholarships, grants, and private student loans. These can help bridge any potential gaps in funding. In fact, borrowers can apply for a Student Choice line of credit even if they are unsure of how much they will need to borrow, or even which school they will be attending.
Conclusion
The 2024-25 FAFSA has presented significant challenges and frustration for college students. As the U.S. Department of Education moves forward, it is crucial for students to stay informed and proactive during this uncertain period. Seeking guidance, exploring alternative financial aid options, and planning ahead will empower college students to navigate these potential changes and make informed decisions regarding their educational journeys.
As this year’s financial aid award season unfolds, our experts can help you navigate your options.
