Key Takeaways
- While well-intentioned, the FAFSA® Simplification Act has caused several challenges and setbacks in distributing financial aid.
- Utilizing grant funding or implementing an emergency loan program can help cover essential student expenses before aid is disbursed.
- Higher education institutions should use this situation to assess and improve their financial aid infrastructure for future success.
The 2024-2025 academic year — which began as early as May for some schools’ summer semesters — has experienced unprecedented delays in releasing and processing the Free Application for Federal Student Aid (FAFSA®).
These delays are causing significant concern among educational institutions and students alike. Schools struggling with enrollment may face further challenges if they cannot distribute financial aid to students on time. For students, these delays may impact their financial stability and negatively affect their educational and career plans.
What’s Causing FAFSA® Delays?
This financial aid crisis originates from the FAFSA Simplification Act, enacted by Congress as part of the Consolidated Appropriations Act of 2021. The legislation aims to simplify the FAFSA® process by reducing the number of questions, enhancing data sharing with the IRS to ease completion for families, and expanding Pell Grant eligibility to more students.
However, these well-intentioned changes required a comprehensive redesign of the methodology used to determine student eligibility. This overhaul involved significant technological upgrades and increased data verification requirements, leading to numerous setbacks.
How You Can Help Students
Consider the following strategies to support students and mitigate the impact of these delays:
Keep students updated through various communication channels.
To ensure students are aware of the available financial assistance and remain assured that funds are accessible:
- Utilize every communication channel at your disposal.
- Engage your admissions and financial aid teams, academic advisors, and other student services to disseminate this information.
- Leverage traditional marketing efforts, including social media, text, and email campaigns.
- Use existing resources, such as the National College Attainment Network's #DoTheFAFSA campaign and social media toolkit, to simplify your efforts.
Offer FAFSA® completion assistance.
Expand your financial aid counseling hours and offer both on-site and virtual FAFSA® completion events to support students through the application process. Partner with TRIO’s Educational Opportunity Centers and other free college assistance agencies to extend your reach. Take advantage of state-specific resources; for instance, EducationQuest offers free FAFSA® and college access assistance in Nebraska.
Students can be directed to online resources such as StudentAid.gov for detailed FAFSA tips, FAQs, and Aidan®, the Department of Education’s financial aid chatbot.
Leverage interim disbursement flexibilities.
Address packaging and processing bottlenecks by utilizing interim disbursement flexibilities. Transmitting estimated aid amounts to student accounts before FAFSA® corrections are finalized has always been an option. Still, the Department of Education has temporarily expanded the ability to disburse based on an estimated Student Aid Index (SAI), even without a valid FAFSA® on file (except in certain circumstances).
The school is ultimately responsible for ensuring aid amounts are correct once the FAFSA® can be fully processed, as stipulated in Electronic Announcement GENERAL-24-56. Prioritize students with the most urgent needs and expedite processes for them when possible.
Provide emergency aid funds.
If your institution’s foundation has grant funding available, deploy these resources to offer immediate financial assistance to students.
In the absence of grants, consider implementing an emergency loan program for students with anticipated credit balances.
These loans can help cover essential expenses such as rent, car payments, or utility bills that may be due before their federal aid is disbursed. Clearly communicate to students that these loans will be repaid through their federal aid, which may reduce their expected refund.
Collaborate with local organizations.
Develop partnerships with local nonprofits, civic organizations, philanthropic foundations, and businesses to expand the pool of available resources. By providing grants, emergency funds, food, or supplies, these organizations can help support students with the most urgent needs in your community. This collaborative approach not only aids students but also contributes to the economic vitality of your region.
Next Steps for Higher Education Institutions
While the delays in FAFSA® availability and the subsequent difficulties with both federal and institutional system updates have been challenging, this situation also presents an opportunity for schools to assess and improve their financial aid infrastructure.
Developing robust contingency plans, evaluating office staffing needs, and investing in technology and other resources to streamline processes can enhance preparedness for future disruptions. These steps will not only help navigate the current crisis but also build a more resilient and efficient financial aid system for the future.
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