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Complicating FAFSA


WORLD Radio - Complicating FAFSA

In trying to streamline the financial aid process, the Department of Education is experiencing errors and causing delays for colleges and students

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MARY REICHARD, HOST: It’s Tuesday the 16th of April, 2024. This is WORLD Radio! Thanks for listening. Good morning, I’m Mary Reichard.

LINDSAY MAST, HOST: And I’m Lindsay Mast. First up on The World and Everything in It: Students in limbo.

This Spring, many high school seniors across the country are deciding where they’ll go to college. Often, a key step in the process is filling out the Free Application for Federal Student Aid, or FAFSA, during the fall… then waiting for colleges to send acceptance letters and financial aid packages at the beginning of the year. By April, students should be making commitments ahead of deadlines this month.

REICHARD: Well, that’s what’s supposed to happen. Last fall, the Education Department reworked FAFSA to try to make it easier for students, but program delays and technical bugs have left many students waiting to submit their FAFSA…and putting college decisions on the line.

MAST: So why did the FAFSA change and what’s wrong with the new version? WORLD’s education beat reporter Lauren Dunn has the story.

LAUREN DUNN: Sima Farid and her 17-year-old daughter live in New Jersey. Farid’s daughter is a high school senior and wants to go into biomedical engineering.

SIMA FARID: My daughter was impacted medically, as a child by some some health issues, and she wants to give back and help in a manner that helped her.

So, she applied to the whole gamut of schools in the fall and submitted the new FAFSA form once it came out in December, and then waited for it to be processed, and waited.

FARID: It wasn't until I think, last week for us, and I filled it out the first week the form was available.

Farid’s daughter got into most of the schools she applied for, but they didn’t send her a financial aid package, because they couldn’t access her FAFSA information.

If they don’t know their financial aid package, Farid says she might need to commit to the New Jersey Institute of Technology which didn’t offer any scholarships but has a smaller sticker price.

FARID: Without the financial aid determination and knowing where we're at, that tuition is in state that's about the most I could do. I would have to have her commit to there or commit to a non-engineering school which offered her more money and I knew was more affordable out of pocket which would alter then the major that she wants to choose because they don’t offer engineering.

Students all over the country are facing the same problems. According to the National College Attainment Network, FAFSA completion rates are down about 40 percent from last year.

Catherine Brown is a policy advocate with the organization. She says normally, most students who go to college complete the FAFSA, and then they complete another one every year they’re attending school and want government aid.

CATHERINE BROWN: Not only does it unlock federal financial aid, it also unlocks most institutional aid and also state financial aid. So basically, any student who needs financial aid, which is the vast majority of college students, has to complete the FAFSA in order to receive it.

In 2020, U.S. lawmakers passed a law to simplify the FAFSA. Normally, the form becomes available on October 1, but the Department of Education released the new version in December.

The new version is slimmed down from roughly 100 questions to fewer than 40.

It also simplifies the process by pulling some information directly from the IRS instead of students having to find it and prove it’s correct.

BROWN: So for those that have been able to get through it, that have not had any technical glitches, they have reported overwhelmingly that it's a positive experience.

But others have experienced glitches, and of the forms submitted about 30 percent contain processing or data errors.

So not only did colleges start receiving the FAFSA information two months later than usual, the forms they do have may contain errors.

Brown says the Department of Education released a list of which forms have the problems, but colleges will have to go through it manually.

BROWN: If you're trying to package aid for thousands of students, you don't really have time to sort of go line by line and see which, you know, case number is error free versus error filled.

If a college does decide to process the forms and send aid packages anyway, they’ll have to redo the process if there’s an error and the student is owed more or less aid.

So, most colleges have instead pushed back decision deadlines. But Brown worries that since most students require some kind of financial aid, the FAFSA issues could mean many high school graduates delay college or don’t go at all.

BROWN: The cost of college is too high, and it's skyrocketed. It's exceeding inflation. And we need structural measures to bring that cost down, absolutely…We believe in the simplified FAFSA and we’d like to see if that translates into more students receiving financial aid and going on to college.

CATO Institute education researcher Neal McCluskey says government student aid started out as a way to help low-income students go to college, so how did it become a necessary step in almost every student’s path to college?

NEAL MCCLUSKY: Economists call it the third-party payer problem where, you know, it's not the college paying. And it's not often the student paying, although the student pays some of this. But a lot of what's paid is paid for by third parties, in particular taxpayers.

McCluskey says this means colleges and students are less incentivized to be efficient and economize, because to an extent, students can always find the money to pay for it. And he says the Biden administration’s student loan forgiveness program would only make it worse.

MCCLUSKY: That will be sort of across the board telling everyone take on more debt, don't worry, you won't have to repay it all.

He says the best way to bring higher education prices down would be slowly reducing the amount of government aid available.

But that solution would help future students.

For now, the Department of Education is working on the FAFSA to help students afford college in the current system.

Catherine Brown says that once the corrections are completed, more students and families can get out of limbo and start making decisions.

BROWN: We're hoping within the next two weeks the process will be smooth in terms of once students complete it, within one to three days colleges will receive that information, and then the financial aid package, the financial aid offers will come to students.

Mary Muncy contributed research and reporting to this story. For WORLD, I’m Lauren Dunn.

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