The higher education industry anxiously awaited the 2024-2025 FAFSA. With promises of simplifying the process and removing barriers to help students, it promised hope for many. However, as the released approached, and informational sessions with unanswered questions and delays with release, the feeling went from hopeful to anxious. Would the new FAFSA help students? Will the schools be ready? After time passed, it was clear that the process was going to be met with obstacles. And looking back, these obstacles were all red flags.
Now, in March of 2024, those obstacles are on-going. Those obstacles may prove to have serious impacts and can create issues in the financial aid process.
The FAFSA Simplification Act
For decades, many stakeholders voiced concerns about the cumbersome FAFSA application. The application had over 100 questions, required multiple family members to participate, and many felt like their efforts only resulted in offers of student loans.
The FAFSA Simplification Act tried to fix some problems with the form and promised to make things simpler and more transparent for students. But making such big changes is tough. The changes to the form, making it mandatory to offer consent to transfer federal income tax information from the IRS, and changing the way student aid is calculated (now called SAI instead of EFC) was a big job. The deadline for this was Dec. 31, 2023. Even though the Department of Education released the application by the deadline, it was obvious the form wasn't quite ready.
Since the release in December 2023, students, schools, and states have faced challenges. These hurdles have had real effects, even down to the student level.
The Confusing Release
The 2024-2025 FAFSA delay was expected. It was announced several months before October 2023, that the FAFSA would not be ready until December. The financial aid industry reacted. Schools and states shifted FAFSA deadlines to accommodate the delay. However, everyone still was dealing with a moving target. There was no announcement of the actual release date, and days prior it was announced that the released would be a soft launch.
Soft launches are typically used to soften the impact of an inadequately tested system and manage expectations. However, in this case, the soft launch affected students who were unaware of potential issues they might encounter, leading to chaos. Social media buzzed with confusion as students encountered unfamiliar terms, application glitches, and uncertainty about submission status. Financial aid offices were inundated with inquiries they couldn't resolve.
Financial aid professionals advised a new approach: if you can afford to wait without missing a deadline, then wait. The traditional advice of completing the FAFSA as soon as possible was replaced by caution given the uncertainties caused by the soft launch.
2024-2025 FAFSA Processing Delays
As the weeks went by, the application process didn’t improve. While (most) students were having an easier time completing the application after the soft launch period, they were met with zero answers. Students received estimated SAIs and some students received messages that their SAI could not be calculated. They couldn’t even guess what their financial aid packages would look like from their school. In a world where information is readily available, it has been a challenge for students to wait. No one had received a FAFSA Submission Summary and every had their FAFSA in a status of processing. In addition to the quirky application, the processing of a student’s FAFSA was going to delayed during the soft launch area. Schools and states did not make many changes based on these soft launch processing delays.
In the eleventh hour before the end of the soft launch period, the U.S. Department of Education decided to act on an issue of concern from industry experts. The formula used to calculate a student’s SAI was using financial tables from 2020, despite significant market changes since then. Without making the necessary changes to the formula there would be students excluded from need-based financial aid. The decision was made to update the formula, causing more confusion, but ultimately it would be the correct decision for students. The main source of frustration, there had been countless news articles and industry experts alerting the U.S. Department of Education about the issue. The formula, in the eyes of many, could have been updated prior to the end of the soft launch.
This formula updated resulted in additional processing delays which would run through March. These delays required action from schools. After a school receives the institutional student information record (ISIR) for a student, it can take a few weeks to process a financial aid package. This processing delay resulted in several schools pushing their college decision deadlines to June. Even with their decision deadlines pushed, students will have limited time to deal with FAFSA issues, verification, and financial aid negotiations with their prospective schools.
FAFSA Processing Mistakes
Last week the U.S. Department of Education announced issues with a processing mistake. The mistake involved approximately 200k students and resulted in the need to reprocess the FAFSA of the affected students. The impacted students likely weren’t aware of the issue, and the process with be managed by the schools. While transparency is appreciated, the issues have compounded.
Result of the 2024-2025 FAFSA Release
The intention of the law wasn’t carried out in the execution of the FAFSA Simplification Act. The simplified form has created confusion and anxiety for students and schools. Students feel unsure of what to expect and they already feel like they are behind.
FAFSA Release Ripple Effect
The financial aid community has been working through the hiccups, issues, and delays. Yet there have been noticeable impacts. The ability to hold FAFSA working sessions, which help thousands of families across the nation, have been limited or not as effective. Financial aid offices at schools are inundated with questions they can’t answer, and the hold time to contact someone at the U.S. Department of Education have been long. Many students have given up, and while the hope is they will try again later, the impact may be felt for years to come.
FAFSA application submissions are down when compared to the same time last year. While there has been some uptick in application submissions, there is concern the damage has already been done. The U.S. Department of Education has some work ahead of them to get through this FAFSA season.
Moving Forward with the 2024-2025 FAFSA
If you have faced challenges submitting your FAFSA this year, don’t give up. The application is still the most important financial aid application to complete. It may take time, but you may be eligible for federal student aid grants, work-study, or federal loans. In addition, you may qualify for state or institutional aid.