Latest FAFSA Error Could Add To College Financial Aid Offer Delays – Forbes Advisor – Technologist

With just weeks to go before the traditional May 1 deadline for students to accept their college admission offers, the Department of Education has found tax data errors that could further delay the processing of many students’ financial aid forms.

It’s just the latest problem plaguing the 2024-2025 Free Application for Federal Student Aid, or FAFSA, following a makeover that was supposed to simplify and streamline the process of applying for federal financial aid for college.

This new complication involves inaccurate or inconsistent family tax information sent to schools by the IRS—affecting the Institutional Student Information Records, or ISIRs, of almost 20%, or about 1 million, FAFSA applicants.

The Education Department plans to update the tax information and reprocess about 5% of forms within the next couple of weeks to ensure that students are eligible for as much financial help as possible.

“Where adjustments would result in less aid to students, we will not reprocess unless asked to do so by schools after exercising their professional judgment,” it said in an April 2 update.

The FAFSA determines a student’s eligibility for federal grants, such as Pell Grants, work-study programs, and student loans. Several state-level higher education agencies and schools use the FAFSA to distribute financial aid to students.

About 6.6 million FAFSA forms had been successfully submitted as of April 1, according to the Education Department.  In a typical year, more than 17 million applications are received.

FAFSA Problems Have Been Ongoing

The tax data glitch is the latest in a series of problems that have cropped up since the FAFSA overhaul.

The revamping effort took longer than expected, and the form didn’t become available until late December—three months later than anticipated. In the past, students could start filling out the form as early as October 1.

Then, for the first few days after launch, students and families could not access the FAFSA for long stretches of time.

In January, the Department of Education modified its formula for calculating how much of a family’s income should be shielded from financial aid consideration. It had initially relied on tables that were three years old and therefore not in line with recent inflation; that could have caused some families to receive less aid than they deserve.

Following the update, the Education Department announced that it wouldn’t start sending ISIRs to colleges and universities until mid-March. It had earlier set a target date of late January, which was already later than usual.

And, in late March, another error surfaced, this one involving the formula for calculating aid for students with assets like investments or bank accounts. About 200,000 ISIR forms that were submitted to schools before March 21, 2024, will have to be reprocessed, officials said.

How Will This Latest Glitch Affect Financial Aid Offers?

Experts are concerned that many students won’t get their financial aid packages in time to make an informed decision about where to go to college and how to pay for it.

However, according to a survey by the American Council on Education, about 60% of colleges and universities are extending their May 1 FAFSA deadlines to give students more time.

The Department of Education has also announced a FAFSA College Support Strategy to help colleges process financial aid forms quickly. It includes an offer to send personnel and other help to selected schools with fewer resources.

Students and families who have submitted their FAFSA are advised to stay in contact with their institutions and to monitor federal student aid alerts for updates.