Feds Suspect More FAFSA Errors, Will Again Reprocess Forms

For the second time this year, the U.S. Department of Education will reprocess tens of thousands of federal student aid applications because of a decimal place error, officials announced Thursday.The department said that next week it will reprocess "less than 160,000" applications where officials suspect a student may have incorrectly inserted a decimal place into the online application's income box, artificially boosting his or her wealth in the eyes of the federal formula that determines aid.

The misreported adjusted gross income, in some cases, may have led students to be denied for a Pell Grant or have their award reduced from what it should have been had they correctly filled out the Free Application for Federal Student Aid, known as the FAFSA. Some of those errors were caught in July when the department reprocessed 182,155 applications to correct a similar error in the "earned income from work" box, officials said.  Most of those applications, however, involved students appearing qualified for more aid than they should have been. 

In the current batch of reprocessing, department officials said they are targeting applications where a student's adjusted gross income is greater than $100,000 or a parent's adjusted gross income is listed above $500,000. "While meeting these criteria does not mean that an error occurred -- we actually do have students who earn more than $100,000 and parents who earn more than $500,000 -- we believe that it would be prudent for institutions to review these transactions to ensure that the financial information is accurate," the department's announcement said. 

The department on July 1 reprogrammed its online FAFSA form to automatically drop any fractional dollar amounts that are erroneously entered into the system, which accepts only whole numbers, in order to prevent the problem from recurring.