May 1 is usually college decision day, but FAFSA problems are causing delays

Washington (CNN) — May 1, known as college decision day across the country, is usually a celebratory time for high school seniors. But this year, many students are stuck in limbo as they wait for delayed financial aid award letters – and have yet to decide where to enroll this fall.

The holdup stems from problems with this year’s FAFSA (Free Application for Federal Student Aid), which students must submit to qualify for federal loans and grants, as well as for most financial aid offered by colleges and states.

A new version of the form was released by the Department of Education late last year. The changes simplified the form and are expected to make more students eligible for financial aid. But a number of processing problems and glitches led to major delays.

Typically, colleges and universities are able to deliver financial aid award letters to students in March. But many schools did not receive the FAFSA data they needed from the Department of Education until March, and once they did, millions of forms were found to have errors and needed to be reprocessed.

Many schools traditionally require students to decide by May 1 whether they are enrolling in the fall. Hundreds of schools have pushed back their deadlines this year. But not every college has changed the date, forcing some students to make a decision and pay a deposit without having all the information about how much college will cost.

The Department of Education has faced criticism for the botched rollout of the new FAFSA from lawmakers on both sides of the aisle, as well as from college financial aid groups. At the request of some Republican members of Congress, the Government Accountability Office has started an investigation into the new form’s implementation.

The head of the Federal Student Aid office who is tasked with managing the FAFSA, Richard Cordray, said last week that he will step down soon. He will not continue his role for another three-year term but will stay on through June to help with the transition.

Where things stand

The Department of Education said Tuesday that it is now processing FAFSAs quickly and accurately. A form submitted today will be processed and sent to the relevant colleges within one to three days.

Plus, the department has finished reprocessing all forms that were initially sent to colleges with errors.

“It’s certainly been a challenging year for the FAFSA, but I’m proud of the progress we’ve made in recent weeks,” James Kvaal, undersecretary of education, said Tuesday on a call with reporters.

Still, there are many families waiting for financial aid award letters.

As of April 23, only about half of colleges had sent aid packages to some or all students, according to the National Association of Student Financial Aid Administrators.

FAFSA completions are way down

Overall, FAFSA completions among high school seniors are down 29% compared with the prior class at the same point last year, according to the National College Attainment Network.

There’s been bigger declines among students who may need the aid the most: at lower-income schools and at schools with a higher percentage of minority students.

This has raised fears that students are leaving money on the table and that some students may opt out of college altogether.

Students who may need help with filling out the form are less likely to have support after high school graduations, which in some parts of the country take place in a matter of weeks.

Problems with the new FAFSA

The rollout of the new version of the FAFSA was delayed, and the form wasn’t available until three months later than the usual October 1 date.

Once students and families could access the form, some experienced a number of problems.

For example, students whose parents don’t have Social Security numbers have had trouble submitting the FAFSA form. On Tuesday, the Department of Education launched a new process for impacted families so they can more easily create online accounts without facing delays to verify their identities.

Additionally, the Department of Education did not provide the functionality for students to make corrections or updates until mid-April – a process that’s usually available immediately.

Further problems on the backend and a last-minute change to the aid calculation delayed the transfer of FAFSA information from the Department of Education to colleges and universities.

But the new FAFSA is easier and faster to fill out than the previous version, which could be a maximum of 108 questions. Now, some applicants have to answer as few as 18 questions.

The Department of Education has also estimated that 610,000 more students will qualify for a federal Pell Grant – which is awarded to those from low-income families – on an annual basis due to the changes to the FAFSA. And an estimated 1.5 million more students will be eligible for the maximum amount, which typically changes each year.

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