The revamp of the Free Application for Federal Student Aid was intended to make it easier for students attending college to apply for federal grants, loans and work-study arrangements. But a botched rollout, plagued by missteps, delays, and glitches, has created even more obstacles.

In a normal year, universities send out financial aid offers shortly after acceptance letters in April. That way, prospective students can understand the cost before deciding to attend, usually by May 1. But with delay after delay, the normal timeline has shifted, with the Department of Education only just beginning to ramp up the delivery of completed forms to financial aid offices this week. 

So far, less than a third as many applicants have filled out a FAFSA form compared to a traditional year, estimates show. There’s still time, as students have until June 30. But the delays could mean a number of students may end up either committing to a college without knowing the costs or deciding not to enroll all together at a time many colleges are desperate to see larger freshman classes. 

“The Department of Education is denying students financial aid through the fiasco of this process,” said Mark Kantrowitz, a financial aid expert. “Some students can’t even consider college until they know it’s affordable—and all the stumbling blocks to getting aid is not helping.”

Delay, Delay, Delay
Under the FAFSA Simplification Act, passed in December 2020, the federal aid application process underwent one of the biggest overhauls in decades. 

The form, which the Education Department uses to determine a student’s expected family contribution—was shortened in the hopes of increasing access to aid for low-income families. But so far, many applicants report feeling frustrated and anxious, with little recourse. 

“We’re running into brick walls and getting no help or guidance,” said Mike Ramirez, a college financial consultant with EP Wealth Advisors. “Some clients haven’t been able to file at all.” This, in particular, is true of students who have a parent without a social security number.

 The online application, which typically goes live in October, was slated to launch in December for those applying for aid in the 2024-2025 academic year. But users, when it launched, reported constant crashes and only sporadic functionality, causing information to get lost, users to get logged out, and applicants to get stuck on a single question.

It wasn’t until January the form was available online 24/7. But even those who have been able to submit their applications are stuck in limbo: the majority of forms have yet to be processed and sent to college financial aid offices by the Education Department.

A spokesperson said the department has begun delivering completed applications to a few dozen schools and is on track to ramp up its delivery volume in the coming days.

“We are putting all hands on deck and using every lever we have to make sure we can achieve the transformational potential of the Better FAFSA,” said U.S. Secretary of Education Miguel Cardona in a statement late February.

However, the delay has meant schools’ financial aid administrators have been unable to prepare award packages for students they plan to accept, said Karen McCarthy, a vice president at the National Association of Student Financial Aid Administrators. Some institutions already know they’ve run out of time too.

Universities, from large public institutions like the University of California system to small private schools like Amherst College, have already announced they will be pushing college decision day—when students typically commit to enrolling at one institution—back from the usual May 1 date. 

“The school year is going to start when it usually does. The finish line hasn’t changed, but the starting time has gotten later, giving less time to do the same amount of work,” said McCarthy. “If the FAFSA is delayed any later, it will be catastrophic to students and institutions.” 

Bad for Business
According to the Education Department’s last tally, 5.4 million FAFSA forms have been submitted so far—which is a fraction of the more than 17 million submitted in a typical year. While students can apply for aid until June 30, it’s unclear if the number of applications will recover. Kantrowitz estimated there will be a shortfall of 2.8 million, or a 19% drop, in applications this year.

The fumbled FAFSA rollout is more than just a temporary headache for students and institutions. It could prove to have long-lasting consequences. 

Without financial aid letters, some students may decided they can’t and won’t attend college. Joe Messinger, a college financial aid consultant with Capstone Wealth Partners, has already encountered families of students who have decided to take gap years while some middle- to low-income families are deciding to skip the college experience altogether. 

“The people that need aid the most are the ones that throw up their hands and give up,” said Messinger. 

The decrease in FAFSA applications and Americans’ continuing disillusionment with higher education is a signal college enrollment could stumble this year. That’s bad news for universities that were just beginning to see students return to campus after the pandemic exacerbated existing enrollment declines. Some schools might be able to withstand a single year of FAFSA mishaps. But many small colleges are already openly struggling, and the missing students on their rosters could force more closures. 

“This is shaping up to be worse than the the decrease in college enrollment since the pandemic,” said Kantrowitz. “Some students are taking this as a sign that college is not for them.”

This article was provided by Bloomberg News.