Department of Education takes steps to speed up college financial aid awards after bumpy FAFSA rollout

By Katie Lobosco, CNN

Washington (CNN) — The Department of Education said Tuesday that it’s taking steps to speed up college financial aid awards for the upcoming 2024-25 school year after a bumpy rollout of the new Free Application for Federal Student Aid, known as the FAFSA.

It’s the first time students and their families are using a simpler version of the FAFSA to apply for student loans and grants. With the new form, more students are expected to be eligible for more financial aid – but the rollout has been plagued with delays.

First, the form – which is usually released on October 1 – wasn’t widely available until early January. Then, after making a last-minute change to the financial aid calculation, the Department of Education said that it won’t be able to transfer students’ financial information to colleges until the first half of March – more than a month later than expected.

The Department of Education has been facing criticism from lawmakers on both sides of the aisle for the delays. A group of Republicans sent a letter to the Government Accountability Office last month asking for an investigation. On Monday, more than 100 Democratic lawmakers called on Education Secretary Miguel Cardona to urgently address the operational problems.

“Any delays in financial aid processing will most impact the students that need aid most,” wrote the lawmakers in a letter led by independent Sen. Bernie Sanders of Vermont and Democratic Rep. Bobby Scott of Virginia.

Department of Education officials have repeatedly said that overhauling the FAFSA has been a major, complicated undertaking that has been made more challenging by a lack of resources. In 2022, the Biden administration requested additional funding to handle a bigger workload, but Congress left its budget the same as the year before.

Steps to speed up financial aid awards

On Tuesday, the Department of Education announced three steps to help free up time for colleges to prepare financial aid packages before students must make a decision about where to enroll next school year.

First, the agency will select fewer FAFSA filers for an added, often lengthy, process called verification to confirm that everything on the form is accurate. In past years, about one-third of applicants were selected for the audit-like process. Previously, the Department of Education waived some kinds of verification for students submitting the FAFSA for the 2021-22 award year due to the Covid-19 pandemic.

Second, the department is going to suspend all new routine program reviews, which are usually conducted to confirm a college is eligible to receive federal funds. In past years, several hundred college programs were reviewed annually. The agency will still conduct the review for programs related to the most serious issues like suspected fraud.

Third, the Department of Education is giving colleges more flexibility to recertify eligibility for federal aid by temporarily waiving a requirement to apply 90 days before the expiration date.

“The flexibility will give more time back to those institutions at this critical moment, so they can focus on getting students the aid they need,” Cardona said on a call with reporters Monday.

Last week, the Department of Education also announced that it will be providing personnel, funding, resources and technology to some colleges and universities to help them get financial aid packages to students as quickly as possible.

What is the FAFSA and how has it changed?

The FAFSA determines eligibility for federal Pell grants and federal student loans – and in most cases, the financial aid provided by colleges as well.

The form has long been due for an update, and the new version released at the end of last year is a culmination of changes approved by Congress in 2019 and 2020.

In previous years, the FAFSA could be as long as 108 questions. With the new form, some applicants will have to answer as few as 18 questions, which would take less than 10 minutes to complete, according to the Department of Education. Some information is now directly taken from a filer’s tax return so that the applicant doesn’t have to hunt down numbers on old tax returns.

With the new FAFSA, an increased number of families is expected to be eligible for financial aid.

In fact, the Department of Education estimates that 610,000 more students will qualify for a Pell grant on an annual basis. The Pell grant program is a key way the federal government helps students from low-income families go to college by providing eligible students with money they don’t have to pay back.

And an estimated 1.5 million more students will be eligible for the maximum Pell grant amount, which typically changes each year. The Pell grant is worth up to $7,395 during the current school year.

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