The U.S. Education Department will fix an error in the formula that determines how much financial aid a student can get, which would have cost students about $1.8 billion, the agency told NPR Tuesday.
When creating the new Free Application for Federal Student Aid and updating the underlying formulas, the department failed to adjust for inflation the amount of income to exclude from aid eligibility calculation. That means families would be eligible for less financial aid in a year when they were supposed to benefit from a more generous income-protection allowance.
Tuesday’s announcement didn’t say when the formula would be updated, and the timing of the fix could create further complications for university financial aid administrators already dealing with tight deadlines.
The department hasn’t started sending completed FAFSA forms to colleges yet. If its officials fix the formula after colleges process those forms and send aid offer letters, financial aid offices could have to go back and recalculate their offers. Or the department could hold off on sending the forms to colleges until it fixes the error, which would delay when students receive the aid letters that outline the costs of an education and the money available to them to help pay for it.
“Students and families were promised a simpler financial application process, and to date, too many have been met with frustration, confusion, and delay,” Justin Draeger, president of the National Association of Student Financial Aid Administrators, said in a statement. “Adjusting these inflationary numbers is the right thing to do, and should have been done from the beginning. Unfortunately, because the department is making these updates so late in the financial aid processing cycle, students will now pay the price in the form of additional delays in financial aid offers and compressed decision-making timelines.”