Changes to FAFSA Cause Headaches for Students, Schools

"An updated version of the Free Application for Federal Student Aid or FAFSA was supposed to go up on October 1st of 2023, it then got delayed," KUAF reports.

..."This new application is the result of a 2020 law passed by congress, which compelled the department of education to update the FAFSA. The form helps federal and state agencies as well as university admissions and financial aid offices determine mostly need-based aid for students. And it has long been a dreaded and tedious task of applying to college.

Jill Desjean, senior policy analyst at the National Association of Student Financial Aid Administrators, said the purpose of the updates was to simplify the form, get more people to fill it out and ultimately, disperse more aid. She believes these changes, which are now in place on the 2024-25 application, are broadly good.

'I think it will make the FAFSA easier for students to complete,' She said. 'There's a lot of just trying to figure out how to answer questions that are worded differently and things like that. But generally speaking, the changes to the forum are good changes, and you know, hopefully not presenting a lot of issues.'

The new form goes from the previous 108 questions to 64, it is also integrated with IRS data so applicants don't have to rely on manually inputting information from a prior year's tax returns.

'And then to complement that as well, many tweaks to the formula that determines student eligibility for federal financial aid, which makes the formula overall more generous,' Desjean said. 'And one of those many changes had to do with the tables that are in the formula that are designed to protect a portion of a family's income from being assessed in the eligibility formula. So just acknowledging that, you know, not all of your income is available for college.'

But after just a few weeks of being open, another problem emerged on the application. That formula had a math error that cost eligible students nearly 1.8 billion dollars of aid.

'What Congress did back in 2020, was they sort of reset the baseline for those income protection allowances, and made them more generous,' Desjean said. 'And then they also stipulated to the Department of Education that each year they should be updating them to account for inflation.'

But the tables were never updated. So families who would have been below the income threshold to qualify for aid, were pushed into a higher bracket.

'The department did come out last week and say actually, that they will now make updates to those tables,' Desjean said. 'Which will basically make the formula even more generous than Congress had in 2020. Because we've had several years of decently high inflation.'

She said the Department of Education however, has not said how or when that will happen. And, that is a problem for students updating their financial aid and for college admissions officers. Many schools don’t have data for the 2024-25 cycle or at least don’t have the correct data."

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: 1/31/2024

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