Education Department Error Could Lower U.S. Students' Financial Aid Amounts

"An error in how the Education Department calculates financial aid threatens to leave some U.S. students with lower subsidy amounts for their secondary schooling this fall," NBC reports.

... "Unless the inflation adjustment is fixed, a family will be considered to have more resources at its disposal than is actually the case, said Karen McCarthy, vice president of public policy and federal relations at the National Association of Student Financial Aid Administrators."

"And that means less money for students in need."

"'The fact that [the department] did not do these updates artificially lowers someone’s aid eligibility,' McCarthy said."

... "McCarthy's organization was among the first to flag the inflation issue in October to the Education Department. She said it appears the department initially decided to not address the issue for the 2024-25 academic year, but that it is now considering doing so as news reports of the error have gained momentum."

... "Now, the department is deliberating whether to punt the update of students' aid eligibility calculations for inflation into the next academic year — effectively shortchanging this year's cohort — or take time to perform the update now but shorten the overall window students may have to communicate with their schools of choice."

"'The spring is going to be a little rough no matter what,' McCarthy said."

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.


Publication Date: 1/9/2024

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