ED Announces 2024-25 FAFSA Inflation Adjustments, But How and When Remains Unclear

By Maria Carrasco, NASFAA Staff Reporter

The Department of Education (ED) on Tuesday announced that it will update the tables used to protect a portion of a family’s income and assets from being considered in the Student Aid Index (SAI) by inflation-adjusted amounts. However, the department failed to give a timeline of when or how the new tables will be implemented, causing concerns among the higher education community around delays in financial aid offers to students. 

First reported by NPR and shortly thereafter confirmed by an ED spokesperson in an email to NASFAA and other member-based organizations, the department said it will be updating data tables used in the Student Aid Index (SAI) calculation to account for inflation for the 2024-25 award year. According to the spokesperson, ED estimates that this update will provide students with an additional $1.8 billion in federal student aid that would have been left on the table had ED's mistake not been corrected.  

“We will share more details on the timeline for these updates soon,” the spokesperson wrote. “We understand the urgency in providing clear information to schools, counselors, students and families.”

The FAFSA Simplification Act passed by Congress in 2020 included a provision that required ED to annually update the tables to account for inflation and other economic changes. NASFAA alerted the department back in October 2023 that the tables had not been updated, and urged ED to comply with the law, especially given the inflation that took place during the pandemic. 

NASFAA President and CEO Justin Draeger said in a statement that this update will benefit many students and give them access to the federal financial aid to which they’re entitled. 

“Students and families were promised a simpler financial application process, and to date, too many have been met with frustration, confusion, and delay,” Draeger said. “Adjusting these inflationary numbers is the right thing to do, and should have been done from the beginning. Unfortunately, because the Department is making these updates so late in the financial aid processing cycle, students will now pay the price in the form of additional delays in financial aid offers and compressed decision-making timelines.” 

On top of the delays for students and families, there are concerns about how the adjustment will impact financial aid offices’ ability to deliver financial aid offers in a timely manner after a rocky launch of the 2024-25 FAFSA. 

“Schools were promised FAFSA applicant data by the end of January. With less than a week to go, the Department has announced a significant operational change that clearly throws that date into question,” Draeger continued. “Also concerning is the fact that institutions haven’t received any operational updates about when they will receive FAFSA applicant information, preventing financial aid practitioners from moving forward with processing and packaging financial aid offers. Even once that information is delivered, distributing financial aid offers to students will take at least several more weeks.”

The rollout of the revamped 2024-25 FAFSA has already been delayed, and the “soft-launch” in late December was marred by glitches and technical errors for some users, most of which are still unresolved

Now institutions, students, and families are left in limbo as they await for more details from ED. The department could either further delay sending Institutional Student Information Records (ISIRs) to institutions after making adjustments, or it could begin sending the information to institutions to start crafting initial financial aid offers that would need to be updated once the tables are adjusted and FAFSAs are reprocessed. 

Either of those decisions leads to equity issues, as higher education advocates have noted, since students from lower-income families depend on timely and accurate financial aid offers when committing to an institution. As Christina Tangalakis, FAAC®, associate dean of financial aid at Glendale College, said in an NPR interview, many students could be discouraged if they receive an aid offer that’s not accurate.

Draeger called on the department to provide institutions operational guidance on how and when these inflationary adjustments will be made, how and when they will impact FAFSA applicant data being delivered to schools, and whether these updates will result in any FAFSA reprocessing, as soon as possible. 

“Students and families need the complete picture of what college will cost them — and financial aid offices will be doing everything they can to ensure students have the information they need as soon as possible to make informed college-going decisions,” Draeger said. 

In light of what is sure to be a busy and challenging spring and summer in aid offices around the country, NASFAA has also asked ED to keep verification selection rates low, to temporarily pause non-urgent oversight activities, and to extend the deadline on gainful employment reporting. Additionally, NASFAA has resources members can use, including the AskRegs Knowledgebase and the FAFSA Simplification Web Center with the most up-to-date information and guidance. 

 

Publication Date: 1/23/2024


Jeff A | 1/24/2024 10:35:51 AM

Keep in mind some of us have a lot of students attending year-round on borrower-based academic years that cross-over. Our institution will make thousands of 24-25 disbursements prior to July 1 beginning as soon as March. As a result, ED is incorrect in saying there is plenty of time before July 1. That is not when disbursements begin for 24-25.

I guarantee we will get FAFSAs that will at some point be regenerated with a change in eligibility. We will be EXPECTED to correct disbursements, and some of those may not be still enrolled at the time. We do not have the resources for this incredible administrative burden.

Yes, Justin, ask for delaying GE reporting...Delay it a year. ED has had no problem pumping out thousands of pages of regulations over the last two years, and diligently working on more. Priorities?

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