Unfortunately the 2024-2025 FAFSA season continues to be riddled by issues in processing. Make sure to keep an eye on our updates and blogs to see how these issues may impact your financial aid for your 2024-2025 academic year.
FAFSA Updates: Continued Processing Errors
This blog will keep you up to date with the latest information regarding the 2024-2025 FAFSA processing delays.
April 4, 2024 Update
On April 4, 2024, the U.S. Department of Education announced the reprocessing of all FAFSA applications affected by errors in transferring IRS information. These were the issues identified on April 1. This corrective action is scheduled for the first half of April. Meanwhile, schools and state agencies have the flexibility to use their discretion in awarding students based on the original ISIRs they received. The Department will assist institutions in identifying the impacted students.
While this reprocessing may lead to additional delays in financial aid awards, schools and states are actively addressing the situation to determine the best course of action for their institution. They must navigate the complexities of managing issues related to the 2024-2025 FAFSA application process. Although it might appear simple to rely on the details from the incorrect applications, fairness is crucial. The FAFSA aims to distribute support based on students' financial need. If disparities arise due to application dates, it is essential to ensure fairness in awarding aid to those truly in need, regardless of when they applied. For example, if a student submitted their FAFSA within the required deadline, would it be fair if one student received a need-based grant and the other did not, even though they reported identical information. Some schools have their own financial aid applications, or they require their students to complete the CSS Profile™. Meaning, they may have the ability to process aid and determine eligibility from other sources. However, not all schools will have additional information to consider.
If you are waiting for your financial aid offer from your school, you may have to wait a bit longer. If you do have questions, you can reach out to your financial aid office. However, keep in mind they may not have all the answers if they have yet to receive your FAFSA information. This year, it’s extremely important to stay up to date with your financial aid applications and understanding your school’s deadlines. If you have already submitted your FAFSA, you may not be able to control the amount of time it will take to receive your financial aid letter. However, you can take the time to establish budget and develop a plan to cover the cost of your upcoming year.
April 1, 2024 Update
Published originally on March 30, 2024 and updated on April 1, 2024. The U.S. Department of Education announced that fewer than 20% of applications, which could be estimated to be up to 1 million applications, had incorrect data from the federal tax information transfer from the IRS. The U.S. Department of Education has been in contact with schools to explain that some ISIRs may include inaccurate information. The affected applications had one of the following issues,
- Data fields pulled a mix of updated and original returns which caused inconsistent tax data,
- The education tax credit data field being inaccurate, or
- For manually input information, inaccurate reported values for education tax credits and income taxes paid, due to discrepancies in the instructions.
The potential impact includes further delays. The U.S. Department of Education is working with the IRS to resolve the issues, however, at this time, a fix has not been announced. While most applications remain unaffected, students impacted will need to have their FAFSA information recalculated. Affected students may not be aware of processing issues unless manual updates are necessary for those who manually entered information. The primary impact will be felt by schools, facing tight deadlines to issue financial aid letters. Schools are questioning the reliability of ISIR information from the U.S. Department of Education, with good reason. Upon receiving an ISIR, schools typically trust it as an accurate reflection of the student and IRS input. Normally, schools only scrutinize FAFSA information if mandated by FAFSA Verification or to resolve conflicting information with the student.
March 2024 Update
As students eagerly wait to receive confirmation that their FAFSA has been processed, news of a vendor error was announced on March 22, 2024. A vendor working for the U.S. Department of Education incorrectly processed and calculated over 200,000 applications. The affected students are students who reported their own student assets on their application. The result the affected students, the Institutional Student Information Records (ISIR), which is provided to each school listed on a student’s FAFSA, was incorrect. Schools will reprocess corrected ISIRs to offer an appropriate financial aid package to the student.
The U.S. Department of Education assured that the issue has been resolved, and any ISIR sent to a school after March 21 is correct. They also confirmed that the error did not and will not impact the 1.3 million correctly processed applications.
It's highly unlikely that the affected students have received their financial aid offers. This is more likely an issue for schools to manage, and they have already dealt with quite a bit this FAFSA cycle. Once a school receives an ISIR from the U.S. Department of Education, it may take several weeks to complete the financial aid offers for their students.
January 2024 Update
You may be gearing up for one of the most critical phases in our educational journey: choosing your college. However, an unexpected announcement from the U.S. Department of Education may be causing ripples in your plan. Even if you didn’t hear the announcement on Jan. 30, 2024, that your 2024-2025 FAFSA information will not be sent to your school until March 2024—meaning, you will feel the impacts when it’s time to pick your college.
The delay in sending your institutional student information record (ISIR) to your school will delay your financial aid package from your school. This means you could feel a time crunch between the time you receive your financial aid package and your college decision commitment deadline.
While many schools are pushing their deadlines to June 1, 2024, due to this delay in FAFSA processing, not all schools will. You need to prepare, not only to potentially make a fast decision, but to also stay on top of your school(s) commitment deadlines.
Understanding FAFSA Delays
You need to understand the root cause of the FAFSA delays is in the backend processing of the information you provide the on the FAFSA. The information you provided in your 2024-2025 FAFSA application is used to calculate your student aid index (SAI). That SAI is used by your schools to determine your financial aid award. However, the tables in the calculation will be updated to ensure students receive the appropriate amount of need-based federal student aid.
College Decision Deadlines
It will take time for the U.S. Department of Education to make those updates and they announced that your information will not be sent to your schools listed on your application until March 2024. That delay may mean your financial aid offices will not be able to provide you with your financial aid package until April 2024. This whole situation puts even more pressure on students and families who are already dealing with the complicated world of college admissions. Now schools and students must quickly adapt their plans and finances, which might lead to rushed or not-so-great decisions.
Typically, around May 1 is the decision deadline for students—however, each school will vary a bit. This year it’s incredibly important to review your school’s website to determine your decision deadline. Some schools are opting to push their decision deadlines to June; however, this will not be all schools. And some schools have indicated some flexibility when it comes to their decision deadline. It’s another date to track and review with the admissions and decision process this year.
Take Some Time to Financial Plan
In the face of these FAFSA delays, it's essential to adopt a forward-thinking approach to financial planning. As part of your strategy, consider discussing alternative payment plans with your parents or anyone helping you in your college journey. Continue to look for scholarship and grant opportunities, and don’t forget to research the opportunities at each school where you are applying.
In addition to researching scholarships and grants, investigate payment methods offered at each prospective school. Are there monthly payment plan options that you can sign up for before the start of your year? This could be valuable information when you start comparing your financial aid offer letters at each school.
Another key tactic is to supplement your financial aid with employment opportunities, such as work-study programs or part-time jobs related to your field of study. Not only can this help bridge any financial gaps, but it also grants you practical experience that will be beneficial in your post-college career.
Create a College Budget
While you're in the waiting game, why not sketch out a financial blueprint for the coming year or even your whole college stint? Especially if you’re an incoming first-year student, you want to make sure to reduce the college cost stress as much as possible.
Sit down with your college support crew, break out spreadsheets and figure out finances. Has money been set aside for your college education? Identify the resources available to you to help tackle tuition. Planning to work while studying? And don’t forget the costs beyond tuition – factor in your daily and weekly expenses.
Take a peek at your future degree and try to ballpark your earning potential once you've got that diploma in hand. It can help you figure out a smart plan for borrowing, so you're not overloading on debt before you've even started your career.
Get Ready to Compare Your Financial Aid Packages
If you receive your financial aid award letters in April, it may limit the amount of time to compare and negotiate financial aid with prospective schools. It’s important to review your financial aid letters and understand the actual cost to attend each prospective school. Remember, net cost is an important figure.
Net cost is the total out of pocket costs for you to attend a school. What you want to do to find your net cost, look at your cost of attendance for your first year and subtract only grants and scholarships. This will result in your net cost for this upcoming year, which is the amount you will need to pay out of pocket or cover with student loans. Use this figure to compare the net cost of all institutions.
When you receive multiple financial aid offer letters, it's crucial to make a clear comparison to uncover which package will serve you best. Start by listing the net costs from each letter side by side to visualize your potential expenses.
Also, be attentive to the proportion of gift aid versus loans. A higher amount of loans might appear to give you a better package initially but consider the long-term implications of debt. Evaluate work-study opportunities; they can offer valuable work experience and help you earn money while studying.
Note Financial Aid Terms and Conditions
Remember to review the conditions tied to each offer. Are there GPA requirements or other stipulations to maintain your eligibility for scholarships each year? Understanding these nuances is crucial for a realistic view of what to expect in subsequent years.
The hope would be, from a student’s perspective, school’s will also feel the time crunch to fill their seats in the upcoming year. Meaning, they will be a bit more aggressive in awarding financial aid grants and scholarships. While receiving additional grants and scholarships are both good things—you need to be cautious about which funds will be available to you in future years. If a school is front-loading scholarships, a common practice for first year students which could be aggressively utilized this upcoming year, the financial aid may not be comparable for future year planning.
Flag a School’s Past Tuition Increases
It’s wise to investigate each institution's historical tuition increases. A school with lower increases may be more cost-effective long-term. Approach financial aid officers with any questions – they can provide context and additional information to help you in your decision-making process. You can do this by checking the U.S. Department of Education’s College Affordability and Transparency List which is updated each year.
Tips for Navigating FAFSA Delays
With limited time and resources, being proactive is more crucial than ever. Here are a few recommendations for coping with the impending delays:
- Engage early and often with your prospective schools. You want to review their website and understand how they intend to manage the FAFSA delays.
- Set a budget plan. Determine your budget and borrowing limits ahead of time. That way you are prepared to plan once you receive your financial aid information.
- Keep looking for ways to fill your financial aid gap. You may expect to have a financial aid gap—meaning, your financial aid will leave you with a balance you need to pay. Continue to look for scholarship and grant opportunities to help you cover the bill.
- Make sure you continue to track your FAFSA progress. While you may be limited in actions to move the process along, you want to be prepared for any additional issues or delays. If you are selected for FAFSA verification or your financial aid office is requesting additional documentation from you, get in touch and work through the issue as soon as possible.
FAFSA Patience
This is an unexpected twist, but it’s manageable even with bumps along the way. Schools are likely to be far more flexible this year to get through the process. There are steps you can take to keep yourself focused on determining the best college fit for your next year.
Hopefully, this will be the hardest year for you to navigate the financial aid process. Keep a vigilant eye on your school(s)’s financial aid website, stay up to date on deadlines, and most importantly, don’t lose sight of your educational goals.