What the Hell Happened With FAFSA This Year?
And who's to blame for this mess?
I’ve been working in higher education for over two decades and in my career, I’ve answered A LOT of questions about financial aid. I’ve talked countless families through their anxiety about FAFSA and have faithfully spread the gospel that while, yes, the FAFSA can be intimating, it’s still a critical step of the college enrollment process. I’ve seen financial aid from almost every angle: as a student, as an admissions counselor, as a college vice president who had the financial aid office in her division, and as someone who has worked on financial aid policy in a variety of settings1… and I can say with certainty that I’ve never seen a year like this.
I’ve also, probably not coincidentally, never heard FAFSA described as a “shit show”, “train wreck” or “clusterf—k” as much as I have this year.
Now here is where I have to issue my usual disclaimer: I’m not representing any current, former, or future employers in my writing here. I am, however, going to give you my best explanation of what happened this year. I also want to share that I think there is plenty of blame to go around for a situation that has taken a process that many families already found stressful and managed to make it worse while in pursuit of changes that were supposed to make it better.
Good Intentions
When Congress passed the FAFSA Simplification Act in December 2020 with bipartisan support, they launched the most significant changes to both the processes and systems used to determine student eligibility for financial aid in well over 40 years.
Many of the changes that were included in the bill were long overdue and largely supported by those in the financial aid community. We were happy to see the Selective Service requirement eliminated and aid eligibility for incarcerated students and students with prior drug convictions restored. We agreed that the form (which had over 100 questions) was too long and sometimes confusing or intimidating for families, especially those who were doing FAFSA for the first time. The promise of a new form with less than 40 questions, that would take families less than a half an hour to fill out, seemed like a great idea. Almost everyone was excited about a new aid awarding formula that would increase the number of students who qualified for a Pell Grant.
I should note here that, despite the significant challenges families and colleges have faced around FAFSA this year, I still think all those changes are good and necessary2. I remain optimistic that FAFSA in the future will be better, but I can also understand why families feel burned this year. I’ve never seen such widespread problems with what is arguably the most critical form many students will need to fill out to make college a reality.
Was the FAFSA Roll Out Doomed From the Start?
There are, in my mind, four key pieces of context that help explain why implementing the new FAFSA3 went so poorly and why the poor rollout was sadly predictable:
The Trump administration era, under the grim leadership of Betsy DeVos, was a turbulent time for the Department of Education. DeVos cut over 10% of their staff. This is significant for what was already one of the smallest federal agencies and that was in the midst of dealing with the staggering effects of a global pandemic when the FAFSA Simplification Act was passed. Department of Education staff were already stretched thin and the original timeline to implement the “new FAFSA” was almost certainly wildly unrealistic, given the pandemic.
To implement all of the changes required in the Simplification Act required an end to end transformation of a process involving millions of users, complicated data tables and awarding formulas, IRS data systems, tons of personally identifiable data, billions of dollars, and double digit numbers of computer systems that had, in some cases, not been significantly updated in 40 years. It was ALWAYS going to be highly complex work, even in a best case scenario…but see #1 for why it was never going to be a best case scenario.
The Department of Education had to make all of these changes described in #2 while continuing to operate the “old” system to make financial aid awards for the 2021-2022, 2022-2023, and 2023-2024 school years. Trying to maintain a legacy process while also implementing an almost wholly new process at the same time is a huge suck of bandwidth and resources.
At the same time as the FAFSA changes were to be implemented, the Department of Education was also dealing with launching and monitoring the CARES Act/HEERF funding to higher education institutions, which involved setting up systems to disburse and monitor $14 billion in new funding. The Department of Education also had to devote resources to attempting to plan and implement the Biden administration's student loan forgiveness program. I think it is a reasonable argument to make that there were simply not enough fiscal or people resources to do all of the on-going work of the agency while also trying to do three major new initiatives at the same time.
When the FAFSA Simplification Act was first passed, the original timeline was that the changes would be completed by October 2022, in time for the 2023-2024 FAFSA application. It was clear almost immediately that this timeline was going to be impossible to meet. When current Education Secretary Miguel Cardona was confirmed in March 2021, the project was already behind schedule. The Department of Education asked for more time and was given essentially another year, pushing the deadline to January 1, 2024.
According to a source quoted in Inside Higher Ed, there are insiders who think that the Department of Education “underestimated the work involved in the FAFSA overhaul from the get-go and viewed the project primarily as a system issue—one that wasn’t as high profile as their other ambitious plans”.
Under the Biden administration, Richard Cordray was appointed to be the chief operating officer for the Office of Federal Student Aid. Cordray, who assumed the role in 2021, had no particular professional experience with financial aid programs, having previously served as a director with the Consumer Financial Protection Bureau and as an attorney general for the state of Ohio. While certainly there are transferable skills from those roles, there is also a reasonable argument to be made that perhaps someone with an actual background in higher education or financial aid might have been able to better anticipate the scope of work and the time needed to implement the new FAFSA.
My take: implementing the sweeping changes required by the FAFSA Simplification Act would have been challenging under the best of circumstances but the last few years have been a cluster of things (some pandemic caused, some political, some just plain poor planning and poor resourcing) that insured that there was no chance that anyone working on this would experience “best of circumstances”.
What Went Wrong
The list of FAFSA issues this year is long and perfectly designed to make it seem like FAFSA was the opposite of simplified for most students and families. The highlight reel of “oh shit” moments includes:
Pushing back the opening of the 2024-2025 application from October to the end of December, which immediately meant that college financial aid offices would lose valuable time for processing aid packages for students. This also meant, for some schools, that decision making about merit aid and institutional grants would also be delayed4
Because of the delays, there was inadequate testing of the new FAFSA, which meant that critical system errors or flaws in the award formula didn’t get detected of fixed as quickly as they could have been.
When the form finally opened on December 30th, it was barely opened for an hour before shutting down again. In the first two weeks of FAFSA availability, the system had multiple periods of unannounced shut downs to fix problems, which meant that students and families were left unable to access the system at all or unable to complete FAFSA applications in progress. Some families flew through the process with ease (I’ve talked to a few who got it done in less than 20 minutes) and some families battled the system for weeks to get it completed.
There were multiple issues with the form including (but not limited to): students not being able to fix errors if they accidentally select the wrong citizenship option, parents not being able to access the FAFSA if they started it on behalf of their kids, FAFSA showing as “in progress” when it was actually ready for submission, and some students with a birth year of 2000 being “continuously looped to student unusual circumstance page”. The fun part is, of course, that some students filled out the form with zero problems and finished in 10-15 minutes and some students hit these weird errors and couldn’t fix them without external help from the Dept. of Ed.
There is a significant processing problem for students who have parents with mixed immigration status or who have undocumented parents that still hasn’t been fixed as of mid-March
The discovery of an error in the aid formula that would have resulted in over $1 billion in aid not being disbursed to students. The Department of Education had to decide if it wanted to fix that error prior to sending student data to college or do corrections afterwards. They opted to fix the error first, which meant that no colleges or universities hit March without getting any student data to be able to package aid.
In a normal FAFSA year, colleges and universities start getting FAFSA data from their students and applicants in November. The year, the very first FAFSAs started arriving in financial aid offices this week. When I say “very first”, I mean it: some states reporting that so far they have less than 10 FAFSAs released from Department of Education so far. Current estimates are that it will take into April for the 5 million+ FAFSAs that have been completed to all be sent to financial aid offices. This means that financial aid offices are five months behind where they would normally be on issuing aid offers to students.
The Department of Education has allocated $50 million to help support financial aid offices in getting financial aid processed, but there are a lot of questions about how useful this will be. There simply isn’t a huge pool of people out there that could be hired to drop in as financial aid officers in the next month to try help. Training new people would be far more trouble than it would be worth and so far, most of the colleges that have requested extra help haven’t gotten it yet.
The bottom line is that there will be high school seniors who will be well into April before they have one of the key pieces of information they need to make their college decision. Many schools that have traditionally had a May 1st deadline for students to accept their spot have already pushed that deadline back, which means that it will take longer for colleges to know how many students will accept their spots and how many spots might open up for waitlisted students (for schools that have waitlists, many schools do not).
All of these delays have ripple effects that impact student housing, new student orientations, course registration, and more … truly, nobody wins when financial aid information comes so late.
Who’s to Blame For All of This?
I’ve been interviewed by local and national media about FAFSA several times this year and have seen the tenor of the questions I’ve been asked shift as the full reality of this year’s FAFSA roll out hit. In the fall it was largely “okay, so what’s happening with FAFSA? It’s late?”. In the winter, it shifted to “is FAFSA working yet? What should parents and students do now?” Now, it is starting to shift to “whose fault was all of this? And also, what should students even do now??”
The second part of that question is easier to answer: students who’ve filled out the FAFSA just have to wait. There’s nobody they can call, no string they can pull to get their financial aid offer earlier. Their chosen schools most likely don’t have their info yet and have no way to get it.
In terms of who’s to blame, that’s a more complicated question. There is currently a Government Accountability Office investigation into trying to figure out (along with a whole bunch of investigative reporting on the issue).
I suspect that, like many disasters, there will be plenty of blame to go around. I think blame could rest with:
The Trump administration: There is no universe in which Betsy DeVos was qualified to lead the Department of Education5 and the decision to reduce the size of the agency staff likely drove out experienced financial aid experts who could, perhaps, have better planned for the amount of work this transition would require. Putting people who hate the government in charge of the government doesn’t actually lead to a more functional government… just saying…
The Biden administration: Was the FAFSA implementation prioritized, funded, and staffed the way it needed to be? Was there a recognition that a high level of skill and financial aid knowledge was needed to lead this work? Did the student loan forgiveness work take away bandwidth to fix FAFSA? I think these are all valid questions right now.
The Department of Education: Was the scope of work for this implementation ever accurate? The Department’s communications around this transition were often confusing, both to families and professionals in the field and there were, IMHO, some early warnings about some of the implementation challenges that weren’t taken seriously enough. There are also some questions about why the FAFSA system was so outdated in the first place and if they could have changed the aid formulas first and updated the systems later. This would have likely resulted in a longer project timeline but potentially with less impact on FAFSA filers.
Congress: When Department of Ed asked for more money for the FAFSA project in 2022, they didn’t get it. I also question if the folks that drafted the Simplification Act did enough due diligence about how much work this would actually take and if the Department of Education was staffed to be able to do this.
While it might not be clear who should get the blame for this, I do want to say strongly that college and university financial aid offices as well as state financial aid programs should NOT be on that list. There have been really committed professionals raising alarms about all of this for a long time now and financial aid offices are in a terrible position this spring. They cannot do their jobs but they’ll also likely be the people who bear the brunt of student and parent anxiety/frustration/angst about being in a holding pattern for their award letters. Please be nice to financial aid people this spring, they are just as stressed out as students and families are.
What Happens Next?
At this point, the best case scenario is that some students might start getting their aid offers by the end of March, with the bulk of students getting hopefully some information in April.
For those of us who work in higher ed, we continue to be worried about all of the people who’ve been so put off by all of this FAFSA uncertainty that they’ve skipped the process all together. Currently FAFSA filing rates are down significantly: in an ordinary year, 17 million students complete the form and this year less than 6 million have done it so far. While we expect that number to continue to increase through the spring and into summer, it is hard to imagine that FAFSA filing rates won’t be down significantly this year.
For students from wealthier families, this might not matter a lot. For other students, however, this could mean millions and millions of dollars of grants that don’t get awarded to families who need them. This is especially concerning because one of the benefits of the new FAFSA was that MORE students would be eligible for Pell Grants this year.
The Future of FAFSA
Here is where I think we can have a little space for optimism. I do think that many of the problems that lead to the delayed launch this year are or will be resolved for next year’s cycle. While I haven’t seen confirmation that we can expect an October release for the 2025-2026 FAFSA application, I think it is still possible that we’ll be back in a more regular schedule after this year.
What’s less clear is how much clean up work will have to happen to try to rebuild confidence in the FAFSA and financial aid processes among students and parents who’ve watched this year with a sense of powerlessness and frustration.
It’s been a rough year, but next year will almost certainly be better.
It kind of has to be, right?
Feel free to drop any questions you might have about FAFSA in the comments, happy to help answer them if I can.
Please note that I’ve never been a financial aid officer, so I’m not going to claim expertise on all of the aspects of FAFSA processing, but school level processing has not been the problem this year.
There were also a few other changes that I didn’t love, but largely the good outweighed the bad
The Department of Education has tried to brand these changes as “Better FAFSA” but I can’t quite write that with a straight face yet
Many schools want to see a student’s level of financial need before awarding even merit aid. This is because some merit aid might be earmarked for those who also have financial need and some merit aid is just based on academic success. Aid can come out of different buckets and schools want to make sure they are maximizing the ways the offer aid, so knowing financial need is a key part of that puzzle.
I’m a Minnesotan, where bragging about oneself is quite unseemly but let me say this: I am more qualified to lead the Department of Education than Betsy freaking DeVos and I DON’T THINK I’M QUALFIED FOR THE JOB