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Federal Financial Aid Snafus May Harm Fall Enrollment

Updates to the financial form have led to major delays in students' completion and colleges offering aid. Some analysts worry large numbers of students won't get the help they're entitled to.

FAFSA workshop at the University of Illinois at Chicago
ZaQuela Taylor, assistant director of student services at the University of Illinois at Chicago, assists freshman Krina Patel during a FAFSA workshop.
Vincent Alban/TNS
In Brief:
  • Updates to the federal financial aid form were supposed to make applications easier. Instead, 2024 marks a significant downturn in the number of completed forms as students struggle following significant delays.

  • Students of all demographics are affected but those from mixed-status families, where one or more parent lacks a Social Security number, are facing greater challenges.

  • Financial aid administrators remain hopeful but have concerns about declines in applications and enrollment.

  • This year, a new version of the federal financial aid form has caused serious problems throughout higher education. Its poor implementation has led not only to delays but a significant drop in student completion. Most colleges and universities have pushed back their decision dates — traditionally, students have to decide by May 1, but now they'll have until May 15 or even later. Administrators are worried about the potential implications for enrollment even as they face a demographic cliff, with fewer 18-year-olds coming down the pike.

    Normally, 47 percent of high school seniors have completed the form, known as the Free Application for Federal Student Aid, or FAFSA, by this point in the school year. Now, however, the percentage hovers at just under 30 percent, marking one of the steepest declines seen in recent years.

    “We’re on track to see 20 percent fewer students complete the FAFSA than last year,” says Catherine Brown, senior director of policy and advocacy at the National College Attainment Network. “It's a decline that’s about twice as steep as what we experienced during the COVID-19 pandemic.”

    Completing the FAFSA has long been a notoriously long and sometimes frustrating process. As he prepared to end his career back in 2020, former Education Secretary and Senate Education Chair Lamar Alexander, a Tennessee Republican, pushed for the changes that were rolled out this year.

    The updates were supposed to be simple. Instead of making income and identity verification difficult through completion of a lengthy form — one with over a hundred questions for some applicants — the new FAFSA asks fewer questions and allows direct connection with the IRS for tax information. It was also intended to qualify more students to receiving the maximum Pell Grant.

    A Bad Start

    Instead, things got off to a rocky start due to a delayed and far-from-perfect roll out. It proved difficult for students and their families to complete — especially those from mixed-status households where at least one parent lacks a Social Security number. It has also undercalculated the aid students should receive.

    All of this has led to processing delays that have rippled through the system, leading colleges to push back their enrollment deadlines. Some students, after either having trouble with completing the FAFSA after repeated attempts or receiving insufficient aid estimates, feel demotivated, says Alberto Plata-Hurtado, who works with high schoolers in Oregon. "Students hesitate," he says. "They don't want to work on it."

    Some students are rethinking their plans as a result, he says, opting for community college where the Oregon Promise Grant offers two years of free tuition. Others have lost out on scholarship opportunities because of their inability to complete the FAFSA. While these struggles mainly impact students from mixed-status families, students across the board continue to be affected by delays and what Plata calls “glitches.”

    The Department of Education has cleared its backlog of FAFSAs waiting to be processed. However, there are still concerns about potential long-term impacts.

    “Having one year of low enrollment for a tuition-dependent institution could mean the difference between keeping its doors open or not,” says Jill Desjean, senior policy analyst at the National Association of Student Financial Aid Administrators. “The big picture, what we're worried about, is just fewer students ultimately getting a college degree.”
    Zina Hutton is a staff writer for Governing. She has been a freelance culture writer, researcher and copywriter since 2015. In 2021, she started writing for Teen Vogue. Now, at Governing, Zina focuses on state and local finance, workforce, education and management and administration news.
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