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The long-awaited simplified Free Application for Federal Student Aid should be open next fall, but financial aid administrators and college access advocates are skeptical that the U.S. Department of Education can meet that deadline.

The department is slated to roll out the shorter FAFSA next October, which will be used for financial aid awarded in the 2024–25 academic year. Before then, colleges and universities will need to know what the form will look like, how to comply with the new rules and how eligibility will be calculated. The army of counselors, college access groups and financial aid officers who help students fill out the form will need to be trained.

Exactly where the department stands on the simplification process is unknown—concerning institutions, advocates and families—and concrete guidance has been scant so far, even as changes start rolling out this year.

Higher education associations and advocates acknowledged that the department is juggling many projects and its stretched staffers are likely doing the best they can. Still, they are worried about the department’s pace of implementation and will be watching the process closely.

“Even in a vacuum, where this was the only thing that the department was working on, this is complicated, important stuff, and the significance of getting it right is really high,” said Jonathan Fansmith, assistant vice president of government relations for the American Council on Education. “So it would be hard to do and it takes time and careful consideration, but we’re not in a vacuum.”

The overhaul of the financial aid system that changes how students apply for financial aid and how that aid is disbursed has been in the works for years, but the final stages come amid a busy time for the department’s student aid office. The department is rolling out a debt-relief program for more than 40 million Americans, revamping the Public Service Loan Forgiveness program and resuming student loan repayments in January, among other projects.

“In the best of circumstances, schools will be stressed about the department’s ability to pull this off,” said Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators. “I would say we are not under the best of circumstances.”

Draeger said NASFAA and its members have a host of questions for the department on the simplification process and what will happen over the next two years, including whether the department is still planning to carry out the act in the 2024–25 award year and when guidance on the different provisions will be released.

Draeger and others involved said simplifying the FAFSA and making the other changes in the FAFSA Simplification Act are as important as the administration’s other priorities—and those actions have far-reaching consequences. Millions of students fill out the form every year, which is the key to unlocking federal financial aid as well as need-based state and institutional aid.

“For millions of students, the FAFSA is the gateway to whether they can afford to go to college,” Draeger said. “Changes to this form reverberate throughout the entire country, and it also impacts the data that schools collect.”

Unprecedented Overhaul

A range of lawmakers and higher education advocacy groups have worked to simplify the FAFSA for years, including former Tennessee senator Lamar Alexander, a Republican. The form, running more than 100 questions, is complicated and difficult for students most in need of financial aid, they argued. About 57 percent of high school graduates in the Class of 2021 completed the form, according to the National College Attainment Network. Current college students also have to fill out the form each year in order to receive financial aid.

Congress reached an agreement in December 2020 to simplify the form and overhaul the financial aid system, which doles out more than $100 billion in aid a year. Full implementation of the act already has been delayed a year. The act expanded Pell Grant eligibility, simplified the application and its underlying requirements, and repealed the limitations on subsidized loan eligibility for undergraduate Direct Loans. Additionally, the expected family contribution, which is used to measure how much students can afford to contribute to their college education, will be replaced by the student aid index.

The act was the biggest overhaul to the federal financial aid policy in decades, said Bryce McKibben, senior director of policy and advocacy at the Hope Center for College, Community, and Justice at Temple University. McKibben helped to write and negotiate the act while working with U.S. Senator Patty Murray, a Washington Democrat who is chair of the U.S. Senate Committee on Health, Education, Labor, and Pensions.

“There’s never been a bill in recent memory that changed the formula, eligibility, the form, the process like the way the FAFSA Simplification Act has,” McKibben said. “It’s really unprecedented in that way and in its benefits to students. This is a massive benefit to an expansion of eligibility to federal financial aid.”

The FAFSA for the 2023–24 academic year opened Oct. 1 with some of the mandated alterations, removing questions about Selective Service registration and drug convictions. But NASFAA and other groups are waiting for additional guidance to see how the department plans to carry out the other changes expected to go into effect next academic year. That includes modifying how institutions are supposed to calculate cost of attendance, which is used to determine financial aid packages, and extending Pell Grant eligibility to incarcerated students.

The department has yet to issue a final rule paving the way for the Pell Grant to be used for prison education programs.

Even though the application has launched, McKibben said the department can still make changes to the form itself as well as by issuing guidance to colleges and universities about different provisions that are supposed to go into effect this year.

After that, he said the department needs “six months of solid progress” to be on track to implement the FAFSA Simplification Act as Congress intended. That includes releasing the planned changes to the form in early spring for public comment.

The U.S. Department of Education’s press office did not respond to multiple requests for information about the simplification process. However, Richard Cordray, the chief operating officer of Federal Student Aid, said last month that his office was working toward unveiling a new FAFSA for the 2024–25 award year.

“Delivering the new FAFSA form [is] something we’re pushing hard to do by next October,” he said at the National College Attainment Network’s annual conference.

Meanwhile, college financial aid and admissions officers, along with college access groups, are already hosting information sessions about the FAFSA, fielding questions from families about what the changes mean for them, but they don’t have many answers to share.

“‘I don’t know’ only goes so far,” said Alex DeLonis, the financial aid director at Wabash College in Indiana.

Unanswered Questions So Far

For colleges and universities, questions are piling up about provisions expected to kick in next academic year, particularly on the cost of attendance calculation. NASFAA has asked the department about the messaging about the cost of attendance and how different components should be calculated, but the organization has not received definitive responses that guidance is immediately forthcoming.

“If you don’t have these questions answered about cost of attendance, it makes it really difficult for schools to provide students a reasonable estimate of what it’s going to cost to attend,” Draeger said.

For 2024–25, institutions are trying to determine the implications of the new federal aid formula and how the new Student Aid Index will affect financial aid packages. Unlike the expected family contribution, the index can be negative to show a student’s significant need. Draeger said institutions have been asking the department for months how to factor that negative number into financial aid offers. NASFAA built a calculator for institutions, but it’s based on a set of assumptions that might not be correct.

“Schools actually need this guidance to construct budgets that they can package student aid with, and the schools are the ones left hanging, ultimately,” he said. “If aid offers are supposed to go out, and those aid offers are supposed to be accurate, we need this official guidance from the department, and the longer it takes us to get it, the longer it will take schools to actually implement it.”

Draeger said colleges and universities need “significant lead time” to implement the changes.

“There was a fair amount of stress that this would be pulled off on time, and, well, before the Department of Education’s complete bandwidth was taken up with other initiatives,” he said. “Now, I think that stress level has gone up significantly … Schools are feeling very stressed and want reassurances that this is receiving the time and attention it needs and that this is going to be pulled off.”

The Bottom Line

At Wabash, the FAFSA is at the core of the college’s financial aid operations, and the uncertainty about the next few years is making college leaders nervous, DeLonis said.

DeLonis said he and other college officials need to know the details of the formula. Otherwise, they can’t build a model to predict how to equitably divide institutional aid among students. More information would help with outreach to families and training staff.

He’s already getting questions from families about how the index and other changes will affect their eligibility, but he’s limited in the information he can provide, which puts him and other financial aid officers in a difficult position.

“Whenever we get incomplete information [from ED], we are the ones that are going to have to deal with the families and put them at ease until more information comes out,” he said.

Consuela Perez, the director of enrollment resources at Southern Methodist University, doesn’t expect a discernible impact to the institution resulting from FAFSA simplification.

“The application is still the application,” Perez said. “It’s still going to help schools determine [a] student’s eligibility at our school. That doesn’t change.”

She’s more concerned about the messaging to families about the changes and how that will students’ affect access to higher education and financial aid.

“[Families] know it’s changing, but they don’t know the impact, and we can’t tell them what that impact is ultimately going to be,” Perez said. “It all goes back to the bottom line: How is this going to help or hurt my ability to pay for my student’s college education, knowing that college costs are only increasing?”

She ideally would like the uncertainty cleared by the spring semester, and the sooner a draft of the new FAFSA is released, the better.

“We’re the professionals, but the high schools and the families are totally new to this process, and oftentimes, they rely on us to get that information to them,” she said.

Nicole Ditillo, the program director for the College Advising Corps at North Carolina State University, works with a team of advisers who help high school students in rural areas with going to college. That includes filling out the FAFSA.

She hadn’t heard a lot about the upcoming changes until the National College Attainment Network’s annual conference last month.

“That was the first time it really fully sunk in, the level of changes,” she said. “We knew these things were coming but (it's) just the degree to which they’re changing.”

As her team works with students on the current FAFSA, they are advising both high school seniors and juniors to prepare for a new form next year. She’s starting to plan for how she’ll train the advisers on the new system and talking to high school administrators and teachers about what to expect.

“We work in predominantly underresourced high schools,” Ditillo said. “We serve a large population of first-generation students, so it’s not just the college adviser who needs to know this information. It’s anyone who interacts with the students, because we’re all trying to make sure we support students in what they’re going to do after graduation … It is a big undertaking. And I think it’s something that we all need to start thinking about now.”

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