The New FAFSA: What You Need to Know
The rollout of the improved FAFSA, after much anticipation and some delay, has had a bumpy start. The good news (fewer questions and more Pell eligible students) has been overshadowed by a site launch where many families experienced irregular availability and malfunctions.
The Department of Education met the legislative requirement to open the FAFSA by December 31—but only technically. During the first few days of the launch, access was intermittent and woefully inadequate. Improvements have been made and the site is generally accessible now. Students who successfully submit a FAFSA receive a Student Aid Index (SAI). The SAI is used to determine what amount of federal, state, or institutional need-based aid a student might receive to assist with college costs (we dove into this in more detail in this blog). The Department of Education originally estimated that campuses would begin receiving FAFSA data in early February.
However, the new SAI formula had not calculated for inflation and the Department of Education was required to update the formula. In addition, the asset protection allowance (more often significant to higher income families) also needed to be recalculated to meet the amounts prescribed by legislation. This meant that SAIs were generally higher than they should be, so when the formulas were corrected, some families would be eligible for additional need-based aid. Although this was good news for some students, the time required for the Department to make these necessary corrections has created further delay. The most recent announcement indicates that campuses will now be receiving data sometime in the first half of March.
What does the FAFSA delay mean?
The further delay for colleges and universities to receive FAFSA data translates to additional delays for students. Less time to understand aid notification, out-of-pocket expenses, bills, and financial obligations hits the least-privileged families the hardest—and is in direct opposition to the goal of FAFSA simplification.
Furthermore, once campuses do receive the FAFSA data, there is no “on switch” for institutions. Campus systems require updates to accommodate the new FAFSA parameters, and these system updates typically take several weeks to implement. Additional time is also needed to prepare and complete aid notifications. Finally, checks and verification procedures that ensure accuracy are important steps that all campuses will need to conduct before any financial aid notices are released.
These efforts are time-intensive for campus financial aid offices to complete. If the FAFSA data is received by campus in mid-March, families should likely expect aid notifications sometime in mid or even late April.
These delays also have implications for state funding. States that provide need-based assistance rely on FAFSA data to quantify the amount of need aid a student might receive. The calculations in the FAFSA directly relate to the different formulas states use to determine both eligibility and the amount of grant or gift support students will receive. These grants are an important part of any aid offer and institutions need guidance from their home state to accurately estimate awards before passing the information along to students.
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A few other FAFSA issues we know about…
The Department of Education has a running list of known issues with the current FAFSA that they are working to correct. A few notable ones:
- Graduate students are not eligible for Pell grants but their FAFSA submission indicates otherwise.
- The process for undocumented parents has not been finalized to allow them to complete the FAFSA for their student.
- Institution names are truncated and can cause confusion for families when searching for the right college or university to include.
Tactics to share with students and families during the financial aid process
As students and families navigate the financial aid process and wait for their SAI, here are strategies and suggestions you can share to help them prepare and budget for college.
Set aside some dedicated time to complete the FAFSA.
There are a few steps where both families and students need to log into the portal to complete tasks. If they experience a delay, remind them to relax and try again in a few minutes or the following day. For many, the new FAFSA format has been encouraging, but let encourage them to let your financial aid office know if they are experiencing any frustrations.
Look for the SAI notification
If they completed the FAFSA prior to January 30, families should expect to receive a second notification from the Department of Education with an updated SAI. This new figure reflects the corrections made for inflation and asset protection, and it will be used by campuses to calculate award notifications. If filing after January 30, the SAI should already be calculated using the corrected formula.
Be patient when expecting aid notifications from institutions.
Most merit awards for academic achievement or other talent-based awards can be provided upon admission to the college, but for institutions that provide need-based awards, it is often the FAFSA data that drives this calculation. In other words, any early awards at admission may not be the final amount of assistance that a student should anticipate, and financial aid officers will be working as quickly as possible to provide admitted students with comprehensive aid packages. Families will still have time to compare offers before any May 1 deadlines, and most campuses are known to be willing to offer a few days grace to students who ask for a reasonable extension.
Understand the true cost of college and how to budget for it
Help families understand the total cost of attendance. Explain that directs costs like tuition, fees, housing, and a meal plan (if applicable) will be billed to them from the institution. Indirect costs—things like books, supplies, costs of transportation, and personal expenses—should also be considered but they are not part of a bill. Guide them to net price calculators that include all of the aid they can be eligible for. After students receive their aid notification, help them break down aid, direct costs, and indirect costs so they understand what their out of pocket cost will be, as well as guide them to additional resources to pay for college such as scholarships and loans. Resources such as College Scholarships – Scholarships.com can be a great way to find additional funds to pay for college.
Meet with a financial aid officer
Waiting for FAFSA data means your office may have a little more downtime than normal, so use that to engage families. Offer to show them a sample aid notification so they know what to look for when the notices do start to arrive. Have staff members ready to answer questions about work study, payment plans, loan options.
Encourage exploration of your school and to enjoy the process
Provide information to help explore the choice of major, location of campus, and student life offerings—thanks that make your institution unique. Encourage campus visits and provide ways to meet with students and faculty if possible. Finally, let parents know that their student can lead the college conversation because it is one of the first big decisions that they will make on their own. Before parents know it, their student will be heading into a new and exciting chapter of life. The journey is theirs.
We are here to help you engage students and families during this transition.
As you navigate through this FAFSA season know that RNL has financial aid and enrollment experts that can help you understand what is happening first-hand with institutions across the country. Reach out to our experts and we can set up a time to talk.