Latest FAFSA Glitch Forces Reprocessing Of 200,000 College Financial Aid Forms – Forbes Advisor – Technologist

Hundreds of thousands of students and their families may face a further delay in receiving their college financial aid offers because of yet another glitch in the system that’s used to determine eligibility.

The Department of Education has announced that it found an error in the formula for calculating financial aid on the Free Application for Federal Student Aid, or FAFSA, for students with assets such as investments or savings accounts.

The problem affects about 200,000 Institutional Student Information Records, or ISIRs, that were sent to colleges and universities before March 21, 2024, according to the Education Department.  Those forms will have to be reprocessed.

ISIRs that were delivered on that date or later, and those for students who do not have assets—about 1.3 million in all—are unaffected.

“This is another unforced error that will likely cause more processing delays for students,” said Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, in a news release.

“Every error adds up and will be felt acutely by every student who is counting on need-based financial aid to make their postsecondary dreams a reality,” Draeger added.

The FAFSA determines a student’s eligibility for federal grants, such as Pell Grants, work-study programs and student loans that can make it possible to afford college. Many state-level higher education agencies and schools use the FAFSA to distribute financial aid.

New FAFSA Troubled From Start

The calculation error is the latest in a series of glitches that has plagued the newly redesigned online FAFSA form since it became available in late December, about three months behind schedule. For the first few days after its launch, families could not access the form for long periods of time.

Then in January, the Education Department adjusted its aid calculation formula to account for inflation. The form had initially relied on tables that were three years old to determine how much of a family’s income should be shielded from consideration in determining a student’s financial aid eligibility. A failure to address the problem could have caused some families to receive less aid money than they deserved.

However, that fix caused the department to further postpone the sending of ISIRs to schools until mid-March after having already delayed the target date to late January.

The delays have fueled concerns that many students won’t receive their financial aid offers in time to make an informed decision about where to go to college and how to pay for it.

In response, some universities have extended their usual May 1 deadline for students to accept their admissions offer to account for the FAFSA processing delays.

In February, the Department of Education announced a FAFSA College Support Strategy to speed up the processing of financial aid applications. It includes an offer to send personnel and other help to selected schools with fewer resources.

How Does This Affect My Financial Aid Application?

If your ISIR was among those sent to schools before March 21, your form will be handled in one of two ways:

• If you are a dependent student with assets, your information must be reprocessed by the Department of Education. Schools may offer you a tentative aid package in the meantime.
• If you are a dependent student without any assets, your ISIR won’t be affected by the calculation error. Your information will be processed as planned.

The Education Department has not provided a timeline for reprocessing student aid forms. If you’re affected, stay in contact with your institution and monitor Federal Student Aid alerts for any new information.