Federal Update

The latest on FAFSA —

Bad news on the FAFSA (Free Application for Federal Student Aid) front – the process will be far slower and students may not receive all the aid available to them.

In an attempt to diminish expectations, the U.S. Department of Education (ED) has announced a “soft launch” for the new FAFSA form. The National Association of Student Financial Aid Administrators (NASFAA) is reporting that the ED has set no specific timeline beyond noting that the days before and after December 31 will serve, according to the ED, as a period to “monitor and respond in real time to potential issues” with the new form.

The ED is clearly expecting to be overwhelmed by a stampede of applicants who have been waiting for the new form, noting that students and families don’t have to rush to fill out the form. The ED explained that the Institutional Student Information Records (ISIRs) generated from the FAFSA application will not be available until later this January. Translation: It will take the ED several weeks, instead of the typical few days, to get the information to campuses.

Because campuses receipt of the ISIRs will be delayed, it will take them longer to put together financial aid packages, which will hold up the whole admissions process. Prospective students will make their colleges decisions later and may put down multiple deposits to lock in a seat until they get the offers.

Students will likely make their final decision much later than in previous years, making it very difficult for campuses to project their enrollment in the fall, and hence what revenue they can expect.

If all this uncertainty weren’t bad enough, the ED did not revise its guidelines for the financial aid eligibility calculation for the new FAFSA. Congress mandated updating the consumer price index figures from 2020 to 2023, but the ED didn’t do so – that could mean students will get less financial aid than they’re entitled to.