Financial aid form delay puts low-income college enrollment at risk

The federal government’s monthslong delay in rolling out a new financial aid form is threatening to squeeze out the low-income applicants who need the money the most.

The Education Department typically releases the Free Application for Federal Student Aid on Oct. 1, but a long-awaited overhaul of the form has pushed back the debut until the end of December this year. School counselors and other advocates fear students with the least amount of money could decide not to pursue a degree if they can’t navigate the compressed process.

Counselors are scrambling to connect with students after the holidays to ensure they complete the form in time to figure out which colleges are within their financial reach.

“What we're most worried about is, the less time low-income students have to understand what they can afford and what their options are, it is not just that they will pick a certain institution, but it's whether they'll attend at all,” said Jon Fansmith, the top policy advocate at the American Council on Education, which represents the nation’s colleges. “These delays have a real immediate impact on student behavior and not in a positive way.”

The 2024-25 academic year is expected to be more affordable as students get more federal support. Lawmakers seem on track to maintain the maximum Pell grant value of $7,395 and a record number of students are expected to be eligible for Pell, which is awarded to the lowest-income students.

But the possibility of a turbulent rollout of the new FAFSA could reduce the number of students taking advantage of it. And students will have only a few months to commit to a school by the universally recognized May 1 decision day, leaving low-income students rushing to calculate whether they can afford to attend college.

“It's absolutely a concern that we can't give the messaging we used to give much earlier in the process, that aid is available and therefore college is affordable,” said Kim Cook, CEO of the National College Attainment Network, which strongly supported the FAFSA overhaul.

“That day when you find out you're accepted to an institution or college or university is a happy day,” Cook said. “The day it becomes real and you feel like you can accept it is the day you get the aid offer that tells you you can make it happen. … So now we have a real crunch time coming.”

Filling out the FAFSA is the first step for receiving a Pell grant. The new form includes unprecedented changes, such as allowing some prospective students to answer as few as 18 questions — down from more than 100 — and updates how federal student aid eligibility is determined.

The delay in releasing the form and expected processing delays could disrupt how colleges and states award financial aid, education advocates say, and when students receive award offers that are based on the FAFSA.

"Our top priority is making sure students have access to the benefits the new FAFSA will bring and ensure the form is accessible with minimal disruptions," an Education Department spokesperson said in a statement. "This is the most significant overhaul of the FAFSA form since its inception, which will create a much more seamless experience for students and families."

The Education Department announced there will be a soft-launch period for the application leading up to and following Dec. 31. During this time the department said it plans to monitor the FAFSA website for applications, conduct pauses for maintenance and make updates to improve the user experience for students.

Students and families "do not need to rush to fill out the form immediately when the soft launch period opens," the department said.

School counselors say they plan to host financial aid informational sessions and FAFSA completion nights when students return from winter break in January. But most students will need to have an answer on what colleges they can afford before May. The Education Department has urged schools and states to consider the "possible impact of the soft launch and delays it might create in accessing the form during December and January." The department recommended that school counselors plan their events for late January or even February.

NCAN will track FAFSA completion, Cook said, and may urge colleges to push back their commitment day if they see a lag in submitted applications. But FAFSA completion data won't be available until April at the earliest.

Colleges are concerned about how the delays will affect the composition of their campuses, Fansmith said. Higher education leaders worry about potential challenges in building out their classes and directing aid and institutional resources to students. The FAFSA delay also comes in the shadow of the Supreme Court’s summer decision to gut race-conscious college admissions policies, which experts fear will dissuade students from going to college.

By the end of January, states and schools will get student information that they use to make their financial aid package decisions, Cook said. Institutions then need several weeks to process that student information, she said, “meaning it would be optimistic to hope for aid offers to reach students mid to late February at the earliest.”

Students receive a confirmation email about their Pell eligibility soon after completing FAFSA. But the form’s delayed release prevents college applicants from understanding what they can afford early in the admissions process when many are also deciding whether to attend college.

“There's a lot riding on a successful FAFSA cycle, particularly to help us regain where we've lost in enrollment, particularly for students from low-income backgrounds,” Cook said. “It's an uncertain admissions year, where students are already trying to grapple with whatever the implications of the Supreme Court decision banning the use of race in admissions will be. So this is adding some additional uncertainty particularly for students of color.”

The Education Department estimates that 610,000 students will be newly eligible for the Pell grant. Through the new FAFSA form, 1.5 million more students could be eligible to receive the maximum Pell Grant, which would make the total number of eligible maximum award recipients more than 5.2 million.

Some states have pushed back their award deadlines for state aid or worked with their statehouses in advance of the form release, said Rachel Burns, a senior policy analyst at the State Higher Education Executive Officers Association. But other states are taking a “let's wait and see what happens” approach because it is difficult to predict the balance between state grants and Pell grants students are eligible for, she said.

Minnesota uses FAFSA data to make award decisions, and the state higher education office launched an interagency taskforce to work on the new FAFSA implementation. The agency worked with the state house to get legislative approval of technical changes to its financial aid award process last session and it is working on standing up a new financial aid program.

Still, financial aid to attend college can be really stressful for a lot of families, said Wendy Robinson, assistant commissioner for programs, policy and grants in the Minnesota Office of Higher Education. And while some families have never experienced filling out the FAFSA before, others who have are impatiently waiting for the form to land before Dec. 31.

“Schools, students and parents may need to just have a higher level of patience about hearing from their college financial aid offices,” she said. “College financial aid offices are going to be working their absolute hardest to get information to students as soon as they can, but they just can't get out information until they have it from the federal government.”