FAFSA Problems Will Delay Financial Award Letters

FAFSA Problems Delays Financial Award lettersOn January 30, 2024, the Department of Education (DOE) announced that colleges will receive the students’ FAFSA information in mid-March.  The last DOE update stated that colleges would receive the students’ FAFSA data by the end of January.  As a result, these FAFSA problems will delay financial award letters and possibly some admission letters.

A statement from the President of the National Association of Financial Aid Administrator, Justin Draeger, puts it into perspective.  “On the very day that schools were expecting FAFSA applicant information, they were instead notified by the U.S. Department of Education that they shouldn’t expect to receive that data until March, at the earliest.  These continued delays, communicated at the last minute, threaten to harm the very students and families that federal student aid is intended to help.

Cause of Additional Delays in Financial Awards

During the FAFSA Simplification process, the colleges were expected to get test data from the DOE.  The FAFSA data transferred to the schools is called Institutional Student Information Record or ISIR.  These records are used in the various college financial aid systems.  There have also been delays in this information for testing the school’s own financial aid processes.

The new delay of the primary FAFSA data will put even more stress on distributing financial awards.  This lack of testing could add more delays on the colleges’ side.  They will want to test their systems properly since they issue the award letter, not the DOE.

Other FAFSA Submission Risk

To date, we have blamed the FAFSA problems on the new system.  Another problem that could become a more significant issue is system capacity.  This concern could result in additional downtime and further system delays due to increased demand in a smaller window.  In the DOE announcement, they stated that 3.1 million FAFSAs have been submitted.  It is unclear if they are correct since the schools have yet to see the data.

It would help if you put this in perspective.  The FAFSA usually is available on October 1 of each year.  Based on 2020-21 FAFSA volume data, just under 10 million FAFSAs would have been submitted by the end of March.  For entering first-year students, that number is 3.7 million, and about 17.5 million in total submit a FAFSA.

With this information comparison, we could be at risk for additional system delays due to system capacity issues due to the compressed timeframe.

FAFSA Delay Impact on Students and Parents

The colleges are scrambling as they are just getting this information about the delay.  They will need to adjust their award letter and admission timeline.  I expect these announcements to start later this week.  Make sure you read all of the correspondence from the college as this will be different for each school.

We have listed some of the errors with the FAFSA submission process.  Review that list to confirm you are not at risk for some of these issues.

Here are additional steps that I recommend due to the delays.

  • Confirm the submitted data is correct once it is processed. Your information is available on the FAFSA Summary Report and is available on the FAFSA site.
  • Verify school FAFSA codes are correct. Use the school’s website for the correct number.
  • Use of off times for FAFSA submission due to possible capacity issues.
  • Understand each school’s appeal process and prepare your appeal letter.
  • Organize your information for your state’s financial aid program submission. The state award programs are unlikely linked to the new FAFSA process.  In most cases, you need the FAFSA Summary Report for submission.

FAFSA Problem Will Delay Award Letters Conclusion

For many students and parents, this is a stressful time.  This year you can add the school’s financial aid and admission departments into the mix.  The biggest problem is that the schools are at the mercy of the DOE, which they cannot control.

The good news is some schools have issued their admission letters to the students.  The bad news is you may not be able to afford it.  As admission is an essential part of the process, this is only the first step of a marathon.  An extra few months should not kill us.  The hard part is graduating on time from college.

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