As parents fill out financial aid applications for their college-bound children, they’ve been finding that having a headache remedy nearby is probably not a bad idea. The rollout of the new Free Application for Federal Student Aid, which was designed to be simpler and broaden access to college, has been more painful than expected.
And parents who will have more than one child in college during the 2024-25 school year might have some unexpected sticker shock coming, as well.
According to CNN, “In previous years, the FAFSA could be as long as 108 questions. With the new form, some applicants will have to answer as few as 18 questions, which would take less than 10 minutes to complete, according to the Department of Education. Some information is now directly taken from a filer’s tax return so that the applicant doesn’t have to hunt down numbers on old tax returns.”
An additional 1.5 million students are expected to qualify for the maximum Pell grant award, which is currently $7,395 a year.
What’s changed with FAFSA
The new form uses a “Student Aid Index,” which can be good or bad news for families depending on their income. As CNBC reported, “Under the new system, more low- and moderate-income students will have access to federal grants, but the changes will reduce eligibility for some wealthier families.”
And families with more than one student in college in 2024-2025 could feel an extra financial squeeze. The so-called “sibling discount,” which has in the past provided a break for families that have two or more children in college at the same time, has gone away.
Instead of taking the amount of money a family, based on income, could be expected to contribute to the cost of college and dividing it by the number of kids who will be in college, each child applying finds out what the family could be expected to contribute. And that amount remains for each child. So if a family was expected to contribute $10,000 to the cost of college based on income, that’s going to show up as $10,000 for each child unless the college or university can be convinced to adjust the financial aid offered.
That means financial aid award letters may disappoint some parents and students.
The good news, Menaka Hampole, assistant professor of finance at Yale School of Management, told CNBC, is that creates a “good case” for appealing the award. She and other experts say schools are often receptive to providing more aid on appeal, but families often don’t know that.
The first step is to reach out to a school’s financial aid office and ask how to appeal a decision. Also, if another school made a better offer, a school might be willing to adjust its aid offer.
Rollout not running smoothly
The U.S. Department of Education has reported that just 4 million students had submitted their form by the end of January, which is a small share of the 17 million submitted overall in normal years. And most applications are typically completed by now in those normal years.
On Monday, the Los Angeles Times reported that “panicked high school seniors and their counselors describe the situation as a fiasco, chaos and scary.”
The article said that “sometimes parents and students got to the end of the form, but the system would not let them create the account, saying there was an error but not explaining what it was. Some who didn’t finish the form on the first try or needed to correct a mistake were locked out.”
Parents who don’t have a Social Security number have in many cases been unable to submit a form for their children, even when their kids have Social Security numbers. And if someone filling out a form made any error — even a simple typo — they have to wait to correct it, further delaying their application. The FAFSA portal will not open for corrections until mid-March.
Multiple news agencies reported on students who tried unsuccessfully for weeks and in some cases a month to submit their federal financial aid form. Those who tried to call the U.S. Department of Education’s help line often couldn’t get through or had extraordinarily long waits to talk to a human.
Calling for action
The messy process has captured the attention of more than 100 Democratic lawmakers, who wrote to Education Secretary Miguel Cardona, urging him to address the problems and smooth the process, as The Washington Post and other media reported. “Lawmakers want clarity on how the department plans to communicate any further delays in processing the FAFSA and minimize the potential impact on students.”
Republican lawmakers want the Government Accountability Office to investigate. The Post quoted Rep. Virginia Foxx, R-N.C., chairwoman of the House Education Committee: “The reason students, parents and schools are scrambling to deal with financial aid uncertainty is because of gross mismanagement by the department.”
Because of all the delays on the government’s end of the financial aid process, the LA Times said schools like the University of California and California State University are among those that have extended their deadlines for first-year students to accept their admission offers for fall.
Changing deadlines, dropping requirements
In a call with reporters, Cardona said his department is easing some of the verification burden it puts on colleges and universities so that they can focus on processing and delivering student aid. The schools have traditionally had to do income and other verification on a percentage of applications as well as vet their own processes. That load will be lighter for the time being.
“Here’s the bottom line: Fewer requirements for college and universities this spring means more time and resources freed up to deliver financial aid for students to make the most of the better FAFSA,” Cardona said.
The department made the new FAFSA available three months later than planned. And it now doesn’t plan to send students’ application information to the schools until March, which puts those schools behind in assigning financial aid and getting students to commit.
Inside Higher Education reported that “college officials were underwhelmed by the department’s initial support plan, which includes deploying teams of federal experts to under-resourced institutions. The department will select institutions, starting this week, for the additional help, using a number of criteria such as the percentage of students eligible for Pell grants.”