Delays Could Cause More Trouble – London Reviews

The U.S. Department of Education announced the release date for the 2024-2025 Free Application for Federal Student Aid (FAFSA). The updated form is scheduled to go live by December 31, 2023, although applications may not be processed until late January and early February 2024.

The delay, announced in March, was implemented to make time for an overhaul of the FAFSA application and its verification process under the FAFSA Simplification Act, a measure passed by Congress meant to make filling out the FAFSA easier; it also changes how eligibility is calculated. Despite the overhaul, the delay could significantly impact federal aid use and college enrollment.

What Is the FAFSA, and Why Is It Important?

The FAFSA is a federally regulated form used by prospective and current college students to apply for financial aid for college or career school enrollment. When you complete the FAFSA, you may gain access to federal loans, grants and work-study opportunities. States and institutions use the FAFSA to determine your aid eligibility, and some private aid providers may also use it to evaluate you for aid.

The Department of Education’s Office of Federal Student Aid provides $112 billion in federal funds annually to more than 10 million students. For many students, filling out the form is an essential step for attending college.

What Does the FAFSA Delay Mean?

Following the late 2023 release date of the new form, FAFSA processing will be prolonged due to the delayed distribution of Institutional Student Information Records, or ISIRs, which are reports generated by FAFSA’s Central Processing System and transferred electronically to an approved school. These reports feature key information from a student’s FAFSA that an institution uses to determine aid eligibility.

FAFSA applications won’t be processed until ISIRs are delivered in late January and early February 2024, according to the 2024-25 FAFSA Roadmap released by Federal Student Aid. As such, colleges won’t be able to review and approve applications within the normal timeline.

How Did the FAFSA Change?

The FAFSA changes were prompted by laws enacted in the FAFSA Simplification Act, which was implemented as a part of the Consolidated Appropriations Act of 2021 and amended by the Consolidated Appropriations Act of 2022. The new law requires a statewide overhaul of the processes used to award federal student aid. If you’re planning to complete the new FAFSA, you can expect changes in the following areas:

New Methods for Determining Aid

FAFSA is implementing a new Student Aid Index (SAI) to replace the expected family contribution (EFC) metric used to calculate your aid eligibility. Similar to the EFC, the SAI determines how much federal aid a student needs based on the taxed and untaxed income of the student or their parents. To calculate your need, FSA subtracts your SAI and any other financial assistance from your total cost of attendance.

Using the SAI metric allows the FSA to calculate aid with better accuracy by removing the number of family members in college from the formula, allowing a negative SAI of -$1,500 and setting separate eligibility requirements for federal Pell Grants.

Better Access to Pell Grants

A federal Pell Grant is a type of aid offered to college students that doesn’t need to be repaid. To receive a Pell Grant, you must be an undergraduate student with exceptional financial need. The new eligibility requirements can allow students below the poverty threshold to qualify for the maximum Pell Grant amount. Additionally, confined or incarcerated students and students who previously attended a closed institution are also eligible.

With these changes, Pell Grants will be available to 610,000 more low-income students and 1.5 million more students will qualify for the maximum Pell Grant amount.

Simplified Online Form

The new FAFSA form offers a shorter, simplified process for students and families. Applicants now have the option to skip up to 26 questions based on certain circumstances, leaving only 18 required questions instead of over 103 possible questions on the previous application. This simplified form will allow students and families to submit their information faster with less stress.

Based on the Fostering Undergraduate Talent by Unlocking Resources for Education Act (FUTURE Act), FSA will also use data from the IRS to calculate Pell Grant eligibility and SAI information.

How Could the FAFSA Delay Impact College Enrollment?

FSA plays a significant role in college enrollment for many students. In 2021, $3.75 billion in Pell Grants were unused by students who didn’t complete their FAFSA, according to the National College Attainment Network (NCAN), a post-secondary education advocacy organization. The delay could cause some students and families to miss their opportunity to complete the FAFSA and receive aid and ultimately forgo attending college altogether.

Earlier this year, NCAN urged states, colleges and universities to postpone financial aid deadlines to April 1, 2024 to compensate for the delay. However, if states and institutions don’t comply, college enrollment could suffer.

Alternatives to Federal Aid

For those looking to enroll in college, pursuing aid outside of government funding may be a good option to avoid complications. Consider the following alternative options:

• Scholarships and grants. Unlike student loans, scholarships and grants are a form of “gift aid”—meaning you aren’t required to repay them. Grants are awarded based on demonstrated financial need, while scholarships are offered based on merit. Scholarships and grants can be a great opportunity for students looking to fund their education without the stress of repaying a loan.
• Private student loans. These student loans are offered by private lenders like banks, credit unions and online lenders. Private student loans are separate from the government and have different approval timelines, depending on your lender.