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The U.S. Department of Education announced on January 30, 2024 that FAFSA processing will be further delayed until March as it corrects missing inflation adjustments in the financial aid formula.
The FAFSA Simplification Act, which was part of the Consolidated Appropriations Act of 2021, requires the federal financial aid formula to be adjusted for inflation. The U.S. Department of Education initially said it would not update the formula until the 2025-2026 FAFSA. However, this would result in millions of students receiving less support than they are entitled to.
The US Department of Education has changed course and decided to update the formula after all. By updating the formula, students will receive an additional $1.8 billion in federal student aid, in addition to more financial aid from state and college scholarship programs.
However, updating the Federal Processing System (FPS) to implement the corrected financial aid formula will result in additional delays in implementing the simplified FAFSA.
This is a real mess.
It is unclear why it is taking so long to update the financial aid formula. If the system had been modular, implementing the changes would have taken less than a day.
Long delay in processing submitted FAFSAs
Colleges were supposed to receive the Institutional Student Information Records (ISIR), which contains some of the FAFSA information, including the Student Aid Index (SAI), by the end of January, which was already four months late. Now they have to wait another month and a half.
The U.S. Department of Education will begin sending ISIRS to schools and state agencies in the first half of March. This does not mean that all ISIRs will be submitted by the Ides of March, just that the process will begin by then. There may be further delays.
Impact of FAFSA Delays
The five and a half month delay in providing FAFSA information to colleges will have a devastating impact on the college admissions and financial aid process.
High school seniors are unlikely to receive financial aid offers until at least April and possibly as late as May or June.
They may have to choose a college without knowing how much it will cost them.
Students cannot correct their FAFSAs or add additional colleges until the colleges receive the ISIRs.
Colleges may need to push back the deadline for accepting an offer of admission well beyond the usual decision date of May 1.
A few universities use the CSS profile form to award their own funding. These colleges may be able to provide students with valued financial aid packages. But other colleges simply wait for the FAFSA.
Fewer 2024-2025 FAFSAs were filed this year
The U.S. Department of Education announced that 3.1 million FAFSAs had been submitted through the end of January. In comparison, there were more than 6 million FAFSAs as of January 31 of last year.
The delayed availability of the FAFSA may have contributed to fewer FAFSAs being filed.
The new FAFSA was also plagued with problems, not all of which have been resolved. Some of these issues prevent students from submitting the FAFSA. For example, some parents were unable to obtain an FSA ID card, which is required to electronically sign the FAFSA. Of a dozen issues listed on the FAFSA Issue Alerts page, only three have been resolved. Many other problems do not appear on this page.
Other concerns
The maximum federal Pell grant is not yet available because Congress has not yet completed the appropriations process. This may result in the need to reprocess the FAFSA data if the new maximum aid amount is not available by March.
Members of Congress are concerned about the delays. Rep. Virginia Foxx, chairwoman of the House Education and Workforce Committee, and more than two dozen of her colleagues in the House and Senate have asked the U.S. Government Accountability Office (GAO) to open an investigation into the delayed implementation of the new FAFSA.
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