The U.S. Department of Education is overhauling the Free Application for Federal Student Aid this year, but the agency plans to roll out the new form in December — two months later than usual. That delay could cause issues for college administrators and states, financial aid experts say.
The new FAFSA represents the first major redesign of the form in over 40 years. The revamp intends to create a more streamlined process for students applying for federal financial aid, expands Pell Grant eligibility and lower barriers for certain student populations, including those who are homeless, incarcerated and come from low-income backgrounds.
But the delay could affect state and institutional financial aid deadlines, require colleges to increase staffing, and impact students’ college decisions.
Several aspects of the FAFSA simplification will also add burdens for financial aid officers, such as new reporting requirements and changes to the federal aid methodology formula, said Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, in an email. And, he added, financial aid offices nationwide are already experiencing significant staffing shortages.
“Financial aid offices are certainly feeling the pressure,” Draeger said. “These are the most significant changes to the way students and families apply for and receive financial aid in decades, and they're happening on a tight timeline.”
Indeed, only 28% of financial aid professionals believed their institution was mostly or completely prepared for the FAFSA simplification rollout, according to a February NASFAA survey.
The delay will force financial aid officers to complete their work in a compressed time frame, said Frank Ballmann, director of federal relations for the National Association of State Student Grant and Aid Programs.
“In effect, they’re going to be working twice as hard, twice as long as they normally would,” said Ballmann. “That’s going to be a huge challenge for them.”
Calls to staff up and evaluate deadlines
In an April letter, Richard Cordray, chief operating officer of the Education Department’s Federal Student Aid office, told college administrators to prepare for the upcoming changes by reviewing their admissions deadlines and financial aid practices.
He also recommended potentially staffing up or providing additional funding to prepare financial aid administrators, as well as conducting needed security and software updates. Failure to do those things could result in fines, audits or liabilities, the letter continued.
But staffing up may be “easier said than done,” said Katharine Meyer, a fellow at The Brookings Institution’s Brown Center on Education Policy. Many higher education administrators experienced burnout while keeping operations going and supporting young people during COVID-19 pandemic, said Meyer.
“It’s an incredibly hard time to do hiring right now,” she said. The burnout “has made it really difficult for folks to do hiring in any department, inclusive of financial aid.”
Colleges with fewer staff could have a harder time managing the timeline shift, said Meyer.
However, small campuses may actually see some advantages.
Every college this fall must communicate the FAFSA changes to their current students, said MorraLee Keller, senior director of strategic programming at the National College Attainment Network.
It may be easier for a small, private liberal arts college to communicate the changes to its 2,000 students than it is for a large institution that needs to communicate the changes to 50,000 students, she said.
Colleges in the past have moved their deadlines in response to FAFSA changes.
After the FAFSA switched from a Jan. 1 to an Oct. 1 rollout in 2017, many four-year colleges moved up their priority admissions deadline dates for incoming students seeking financial aid to file the form — in some cases, to early December, said Keller.
College leaders are now having conversations about what those priority deadlines should be for this incoming class — a one year change before the FAFSA reverts back to the October release, said Keller.
“A condensed time frame is going to be a challenge, priority deadline dates are going to be a challenge, getting award letters out in a timely fashion, those are all going to be big challenges,” said Keller.
The delayed rollout could disrupt states as well. That’s because most states need an appropriation from their legislatures to fund their grant programs, said Ballmann.
One way states estimate appropriations needs is by comparing FAFSA applications to last year’s number, he said. Historically, more than half of FAFSAs from high school seniors are submitted between October to December, said Ballmann.
This year, the number filed during that time period will be close to zero, he said.
Keller recommends that states with financial aid deadlines from January to early March — including Texas, California and Maryland — should move those dates back to give students more time to fill out their FAFSAs.
Impact on students
Students unable to secure financial aid awards until the spring may not be able to make early decision deadlines, said Ballmann. That could dissuade students from attending college next year.
The challenge, Ballmann said, will be recapturing students that fall through the cracks or take a gap year.
“If there’s a problem this winter with high school seniors not applying, I think we’ll have a lot of states focus very hard on reaching out to them for the next cycle,” said Ballmann.
The delay could also affect which colleges that students attend if it holds up their applications or if they miss deadlines for scholarship programs.
“That may shift them to a less expensive institution or may drive them to enroll at a local community college instead of a four year college,” Meyer said.