You’re already aboard for a year that the FAFSA® will not soon live down. The 2024-2025 FAFSA has played out as a tale of missed deadlines, unclear accountability, and a labyrinthine web of interaction and failure among various stakeholders and processes.
The Free Application for Federal Student Aid (FAFSA) is the gateway for financial aid and opportunity in the United States. The roll-out of the “simplified” FAFSA release highlights not just the system’s technical woes, but also the monumental sway it holds over the academic futures of millions of individuals.
However, as we dissect the 2024-2025 FAFSA fiasco, not only does it demonstrate a show of technical glitches, but also a culmination of political, financial, and management challenges that have converged to form a perfect storm for student seeking higher education. This perfect storm is going to leave lasting consequences, which could impact the education of millions.
An Overview of the FAFSA Fiasco
The 2024-2025 FAFSA release has been a sequence of unfortunate delays and complications. While the FAFSA Simplification Act was passed in 2020, the U.S. Department of Education requested an additional year for the roll-out of the simplified FAFSA. The promise was to remove barriers to at-risk minority groups who were concerned about their ability to complete the FAFSA to achieve their higher education goals. Unfortunately, even with an extra year, the 2024-2025 FAFSA was not quite ready for debut. The issues have compounded, and while it’s expected to have a few hiccups with each new year, this has been the most challenging year for students and financial aid offices.
The FAFSA Players
The U.S. Department of Education is the federal agency responsible for the federal student aid programs. Within the U.S. Department of Education is the Office of Federal Student Aid (FSA), which manages the programs more directly. From the maintenance of the FAFSA application, they also work with school participation in federal student aid programs, the administration of the federal student aid programs (including federal student loans), and federal student loan servicers through student loan repayment of each borrower.
To help with the FAFSA Simplification Act and the overhaul of the FAFSA, FSA has relied on federal contractors to help with the project. Contractors like: General Dynamics Information Technology (GDIT), Accenture Federal Services, Peraton Enterprise Solutions, and Jazz Solutions. In the recent weeks, these contractors have shouldered some of the blame. Incidents have been flagged as “vendor errors,” which has created a bit of a microscope into these relationships and organizations. While the known vendor errors have been identified in processing, it’s unclear about the issues faced during the development.
Honestly, while contractors may bear part of the burden, ultimately it was the responsibility of the U.S. Department of Education to offer a functional FAFSA application that would not lead to an over six-month delay of financial aid offer letters to students. Hindsight is always 20/20, however, there have been hints along the way that issues of this magnitude could present themselves. Finger-pointing at this point won’t help resolve the problem at hand: providing schools with the necessary information so they can provide financial aid offer letters to their students. It appears Congress has an extremely vested interest in unraveling the failures, but at this point, schools must work as hard as possible to get students the information they need for an informed decision for their upcoming school year.
Schools and Financial Aid Offices
It would be challenging to find a financial aid office that is not affected by the FAFSA delays. While many schools try to send financial aid packages with admission decisions, many schools have yet to send offer letters to their students. Schools have been unable to create financial aid offer letters based on FAFSA information because they either received incorrect, incomplete, or no information from the U.S. Department of Education.
The role of the school is crucial in the world of federal student aid programs. Schools utilize a student’s FAFSA information to create a financial aid award. If the information is incorrect, incomplete, or missing, typically they would be asked to resolve the issue prior to providing a financial aid award. This FAFSA cycle is eliminating precious time for schools to work through the problems. It almost seems like new problems arise every day, and already short-staffed financial aid offices are working over-time through the issues. Some schools don’t rely just on the FAFSA; they may have their own financial aid applications they request from students. These schools may have the ability to provide award packages more easily to students to help get a head start on the awarding process.
While there has been a focus on student impacts, there could also be very real school impacts. Sadly, there may be schools who are unable to provide financial aid offer letters in a timely manner, meaning they will be unable to secure enrollment for enough students in the upcoming year. These schools may be faced with financial hardships, which may lead to closures due to the inability to sustain their institution. While many “brand” name schools have the funds to operate with or without federal student aid funds, some schools operate very tight budgets. Each student enrollment matters and allows them to continue to operate. These schools with tighter budgets may have very understaffed financial aid offices and they may not be able to quickly roll-out financial aid offer letters, and they may miss their opportunity to compete with other institutions.
Coping with the FAFSA Fallout
What do these FAFSA delays overall signify? The need for a strategy, resilience, and the ability to plan with missing information.
Strategic Student Finance
Students and parents may need pivot and develop budget plans prior to receiving their financial aid awards. While many schools have extended their decision deadlines and they have vowed to be flexible, that doesn’t mean that there is unlimited time. Taking the time now to pre-plan will help decide on a school once financial aid letters are received.
It’s important to remember, if you applied to ten schools, you may receive ten very different financial aid award letters. While this is true every year, this year has the added complication that schools may or may not be working off the same information. Due to the issues with processing and the need to re-process some students, schools have been granted flexibility from the U.S. Department of Education to work off the initially received information or to wait for re-processing of information for students who were known to have processing errors. That may mean that one school could be offering financial aid based on the initial information received, while other schools may wait for the reprocessed data.
School Flexibility
If you’re in contact with your financial aid office or admissions counselor, you may be able to work through the need for decision deadline extensions. As a student, you should review each prospective school’s website to determine the best way to contact your financial aid office or admissions office.
The Road Ahead
There is a sense of hope in the financial aid community. Everyone knows that this is an “all hands-on deck” situation, and financial aid professionals have vowed to see it through for their institutions and students. It may not be easy, but there is a sense that it will be resolved, and classes will start next year as planned.
After the FAFSA processing is resolved for the 2024-2025 year, there will be a need to contend with the 2025-2026 FAFSA cycle. While it may seem months away, it will creep up faster than most expect. Many who work in financial aid have already noticed that the draft for the 2025-2026 FAFSA application is late when compared to prior years. But many can’t focus on those issues quite yet because they are still working through the issues of the current 2024-2025 FAFSA cycles.
The media and Congress have been keeping a close eye on FSA. Congress has made it clear that Federal Student Aid has failed to carry out the intention of the law. The failure has yet to be resolved, and it seems like it will take some time for it to unravel. But industry experts are already predicting that the 2024-2025 FAFSA roll-out will have significantly more negative impacts on higher education than COVID-19. In addition, many higher education industry groups are already calling for future fixes to eliminate issues like this in the future.
The bottom line is the issues need to be handled head-on. While there is increased transparency with FSA and an urgency for financial aid offices to survive this year, the fall-out and impact will need to be evaluated in future years.