(Bloomberg) — The recondition THE Free Application for Federal Student Aid was intended to make it easier for college-bound students to apply for federal grants, loans, and work-study arrangements. But a botched launch, plagued by missteps, delays and glitches, has created even more obstacles.
In a normal year, universities send out financial aid offers shortly after acceptance letters in April. That way, prospective students can understand the cost before they decide to attend, usually by May 1. But with delay after delay, the normal timeline has changed, with the Department of Education just starting to ramp up sending completed forms to financial aid offices this week.
So far, fewer than a third as many applicants have filled out a FAFSA form than in a traditional year, estimates show. There is still time, as students have until June 30. But the delays could mean that a number of students could end up either committing to a college without knowing the costs or deciding not to enroll all together at a time when many colleges are desperate to see larger freshman classes.
“The Department of Education is denying students financial aid through the fiasco of this process,” said Mark Kantrowitz, a financial aid expert. “Some students can't even consider college until they know it's affordable — and all the barriers to getting aid aren't helping.”
Delay, delay, delay
Under the FAFSA Simplification Act, passed in December 2020, the federal aid application process underwent one of the biggest overhauls in decades.
The form, which the Department of Education uses to determine a student's expected family contribution, was shortened in hopes of increasing access to aid for low-income families. But so far, many applicants report feeling frustrated and anxious, with few options.
“We're hitting brick walls and not getting any help or guidance,” said Mike Ramirez, a college financial consultant with EP Wealth Advisors. “Some customers have not been able to submit at all.” This is especially true for students who have a parent without a social security number.
The online application, which normally runs in October, was scheduled to begin in December for those applying for aid in the 2024-2025 academic year. But users, when it launched, reported constant crashes and only sporadic functionality, causing information to be lost, users to log out, and applicants to get stuck on a single question.
It was only in January that the form was available online 24/7. But even those who were able to submit their applications are stuck in limbo: most forms have yet to be processed and sent to college financial aid offices by the Department of Education.
A spokesperson said the department has started sending completed applications to several dozen schools and is on track to increase the volume of deliveries in the coming days.
“We're putting all hands on deck and using every lever we have to make sure we can achieve the transformative potential of a better FAFSA,” U.S. Education Secretary Miguel Cardona said in a statement. STATEMENT the end of February.
However, the delay has meant that school financial aid administrators have not been able to prepare award packages for students who plan to admit, said Karen McCarthy, a vice president at the National Association of Student Financial Aid Administrators. Some institutions already know that their time is up too.
Universities, from large public institutions such as University of California system for small private schools like Amherst Collegehave already announced they will push back college decision day — when students typically commit to enrolling at an institution — from the usual May 1 date.
“The school year will start as usual. The finish line hasn't changed, but the start time has gone later, giving less time to do the same amount of work,” McCarthy said. “If the FAFSA is delayed any further, it will be disastrous for students and institutions.”
Bad for business
According to the Directorate of Education the last count, 5.4 million FAFSA forms have been submitted so far — a fraction of the more than 17 million filed in a typical year. While students can apply for aid until June 30, it is unclear whether the number of applications will recover. Kantrowitz estimated there will be a shortfall of 2.8 million, or a 19% drop, in applications this year.
The confusing FAFSA rollout is more than just a temporary headache for students and institutions. It could prove to have long-term consequences.
Without financial aid letters, some students may decide they cannot and will not attend college. Joe Messinger, a college financial aid consultant with Capstone Wealth Partners, has already encountered families of students who have decided to take gap years, while some middle- and low-income families are deciding to skip the college experience altogether.
“The people who need help the most are the ones who give up and give up,” Messinger said.
The drop in FAFSA applications and Americans' continued disillusionment with higher education is a signal that college enrollment may be hampered this year. That's bad news for universities that were just starting to see students return to campus after the pandemic exacerbated existing enrollment declines. Some schools may be able to handle a single year of FAFSA mishaps. But many small colleges are already openly struggling, and missing students on their rosters could do just that force more closures.
Read more: Concern Grows at US Small Colleges as Enrollments Fall
“This is looking to be worse than the drop in college enrollment since the pandemic,” Kantrowitz said. “Some students are taking this as a sign that college is not for them.”
To contact the author of this story:
Paulina Cachero in New York at (email protected)