College & Workforce Readiness

Amid a Rocky FAFSA Rollout, Ed. Dept. Offers Colleges More Flexibility

By Sarah Schwartz — February 13, 2024 4 min read
Applications for the Free Application for Federal Student Aid (FAFSA) form are on the rise.
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As delays and technical problems continue to plague the rollout of the new Free Application for Federal Student Aid, the U.S. Department of Education has announced relief from some regulatory requirements for colleges and universities—a move designed to help them process aid forms more quickly and easily.

The changes are a “direct response” to challenges and concerns voiced by financial aid administrators and university leaders, said U.S. Secretary of Education Miguel Cardona, in a call with reporters Feb 12.

Still, the department hasn’t announced fixes for some of the glitches that have prevented students from completing the form, including one that makes it harder for students whose parents aren’t U.S. citizens.

Each year, about 18 million high school students fill out the FAFSA, the main avenue to receiving federal financial aid and scholarships from colleges and universities.

The new version of the form, which the Education Department debuted late last year, was supposed to streamline the process of applying for financial aid for attending colleges and universities. But the rollout has been plagued by delays and technical snags, leaving some students locked out of the online application and others with little clear idea of when they might receive aid decisions from schools. Nearly 4 million forms have been submitted so far this year, Cardona said.

Because of ongoing delays in the new FAFSA launch, colleges have less time this year to process applications and prepare financial aid offers than in years past.

Originally, the Education Department said applications would be transmitted to schools in January. But then officials pushed that deadline back to March, as they worked to fix an error in the financial aid formula that would have lowered the amount of aid students could receive.

The longer it takes for colleges and universities to receive students’ forms, the later they will send out aid decisions to families—meaning that some students will have little time to weigh options before choosing where to enroll.

The changes to regulatory requirements are aimed at giving schools back time and resources to focus on processing these applications in this shorter time frame. Every year, the department requires that universities verify that information is accurate in a certain portion of FAFSA applications through an audit process; this year, the department is reducing the share of forms that will have to go through this process.

“That will allow colleges to spend less time on paperwork, and more time helping students,” Cardona said.

The department is also suspending its routine reviews of new programs through June 2024, and extending the recertification deadlines for existing programs that would need to renew their eligibility this spring or fall.

In a statement, the president and CEO of the National Association of Student Financial Aid Administrators, Justin Draeger, said the changes are “critical first steps in ensuring financial aid offices—already stretched perilously thin—will have the bandwidth necessary to focus on students.”

But he emphasized that the Education Department must meet its processing timelines going forward. “Schools have been told to expect test [versions of records] by the end of this week, and processed FAFSA information in the first half of March, which will be vital to provide students and families with need-based financial aid information this spring,” he said. “Students and families cannot afford any additional delays.”

How the new FAFSA is different

This year’s overhaul to the financial aid form is the result of the FAFSA Simplification Act, passed in 2020.

The law outlined an application that would be easier and faster for families to fill out. The online version of the new form pulls families’ financial information directly from the Internal Revenue Service, so that students and parents don’t have to answer as many questions about their income. It’s also designed to be shorter to complete. And it expands eligibility for federal Pell Grants to more students.

But for some students, the promise of a more streamlined experience hasn’t been realized.

The form, which is usually available in early October, wasn’t released until the end of December last year. As families began to work on the online application, glitches surfaced. Currently, students with a parent who doesn’t have a Social Security number can’t enter any of their parent’s information into the online form, meaning they can’t complete or submit the form.

Tuesday’s announcement from the department is the latest in a series of steps to address the problems with the FAFSA rollout. Earlier this month, the department said it would deploy federal financial aid experts to lower-resourced colleges and allocated $50 million in federal funding to nonprofit groups that provide technical assistance and support to universities. It also launched a tips website for families.

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