FAFSA inflation fix scheduled for mid-March, delays award notification until spring
Last Updated on February 7, 2024 by Admin
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FAFSA mistake means students may have to choose colleges without knowing the cost of attending. (iStock)
The Department of Education said it will make important fixes to the new Free Application for Federal Student Aid (FAFSA) form, but the mistake will further delay the timeline for financial aid awards into spring.
More than 3 million FAFSA applications have been submitted since the new form was launched on Dec. 30. However, student aid calculations for the latest forms were based on three-year-old tables that did not accurately reflect the current high inflation environment. The FAFSA Simplification Act passed by Congress in 2020 included a provision requiring the Education Department to update tables used in the Student Aid Index (SAI) calculation to account for inflation and other economic changes.
The update gives students access to an extra $1.8 billion in aid, according to the Department of Education. However, the department said it would send the FAFSA applicant data that reflects the inflation update to colleges in “the first half of March” – two months later than initially planned.
“The Better FAFSA makes it as simple and easy as possible for families to get help paying for college, and updating our tables will help even more students get the help they need,” Under Secretary of Education James Kvaal said. “Updating our calculations will help students qualify for as much financial aid as possible.”
If you are currently in school or starting soon and need more financial aid than you can receive through FAFSA, consider taking out a private student loan while interest rates are low. Visit Credible to find your personalized rate without affecting your credit score.
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Adjustments create major setback for students
Students and schools were already working against the clock after the FAFSA rollout happened in late December. Typically, the forms are available on Oct. 1 to give families and schools the necessary time to fill out applications and determine financial aid eligibility so that students can choose colleges knowing the final cost.
Colleges were scheduled to receive FAFSA applicant information by the end of January, which was four months later than they typically receive the applications. The inflation fix further delays the timeline into the first half of March, which means high school seniors are unlikely to receive financial aid offers until at least April and possibly as late as May or June, according to higher education expert Mark Kantrowitz.
“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,” NASFAA President and CEO Justin Draeger said in a statement. “These continued delays, communicated at the last minute, threaten to harm the very students and families that federal student aid is intended to help.”
If you have filed for your FAFSA aid but need additional funding for school, consider taking out a private student loan. Visit Credible to compare multiple student loans at once and find the one with the best interest rate for you.
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What’s new with FAFSA
The 2024-25 FAFSA form expands eligibility for federal student aid, including Pell Grants, and provides a streamlined user experience, according to the Department of Education.
Some 610,000 new students from low-income backgrounds will be eligible to receive Federal Pell Grants due to updates to student aid calculations. An additional 1.5 million more students will be able to access the maximum Pell Grant award, bringing the total number of students eligible for the maximum Pell Grant to over 5.2 million.
The new application also reduces questions to roughly 40 from 100. Applicants will also be able to skip as many as 26 questions, depending on their circumstances.
“Students, parents and families continue to share with us how easy and fast it is to complete and submit the 2024-25 FAFSA form,” Federal Student Aid Chief Richard Cordray said in a statement. “We remain committed to ensuring students and families have stable and secure access to more than $114 billion in federal financial aid. We know how crucial this support is to pursue higher education, particularly for the most underserved communities, and the positive ripple effects an education beyond high school makes in the lives of millions, their communities, and the country.”
If you are interested in paying down your private student loan debt, a refinance could help you lower your interest rate and monthly payment. To see if this is the right option for you, contact Credible to speak to a student loan expert and get your questions answered.
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