Stacy Bennett is a professor of education policy, organization and leadership and a senior research associate with the Office of Community College Research and Leadership at the University of Illinois Urbana-Champaign. Bennett spoke with research editor Sharita Forrest about the ambitious redesign of the Federal Student Aid loan application and its chaotic deployment process this year.
What was the basis for the FAFSA redesign?
The intentions behind the FAFSA redesign were to expand eligibility and simplify the process, making it more user friendly. Technically all eligible applicants should benefit, but so far that has not been the case due to the implementation challenges. Low- income, first-generation and undocumented families were more adversely impacted.
The deployment of the new FAFSA has been fraught with operational problems and delays, including incorrect student data. How are these affecting students’ and universities’ decision-making?
According to the National College Attainment Network, FAFSA applications were down 40% at the end of March compared with last year. That rate was even higher for students from the lowest income families.
Thankfully, things have improved and it appears that the U.S. Department of Education is processing applications more quickly and has fixed some of the technical issues. Data released at the end of May showed that applications were down by 14%, which is still concerning, but not quite as alarming.
While there is still time to apply by the June 30 deadline, it may be too late for some students. Many colleges and universities have April and early May deadlines for students to accept their admissions offer
Some students who submitted their FAFSA application in January still had not heard back about their aid package in April and May. These students either had to take a risk and accept their schools’ admissions offers not knowing if they would receive enough student aid to attend or decline their offers. This disproportionately impacted lower income students.
How have colleges and universities been affected by these delays?
To make their own financial aid offers to students, colleges and universities rely on knowing what kinds of federal aid their accepted students will receive. Not having this information meant that low-income students did not receive their total aid package in time to make enrollment decisions or received incomplete information.
This could dramatically affect enrollment patterns. Colleges that were already struggling with enrollment post-COVID 19 may not be able to survive lower enrollments from FAFSA complications.
While the true impacts will not be seen until late summer and into the fall, I predict that we will see enrollment differences. Those students who were unwilling to take the risk of accepting an admission offer without knowing their aid status may decide to forgo college.
Even if students do receive their aid offer in time to enroll at a different school, they may be frustrated they were unable to attend their first choice. Other students may decide not to bother applying.
It will be interesting to see if more students enroll in community colleges and in-state public institutions instead of private and out-of-state colleges and universities because of lower costs. I am also interested in seeing if schools with large endowments provide more in scholarships to make up for the lack of federal aid.
New rules require that institutions report the cost of attendance and the “value” of their programs. What criteria are involved in calculating value, and how is this expected to affect enrollments and the variety of programs offered?
Colleges and universities must provide the total cost of attendance as part of their financial aid packages and an accounting of the types of aid and loans being offered.
They also must provide the net cost after financial aid is applied so students have a clear picture of the true price of attendance and can compare their options. This could potentially impact enrollments at higher-tuition public universities and private colleges and universities that do not offer much institutional aid.
Additionally, the Department of Education released a new gainful employment rule last fall that requires that graduates be able to earn more than they would with a high school diploma and can pay off their debt. Programs that do not meet these requirements may lose the ability to accept federal student aid or may be required to report this information to prospective students.
This rule will most likely have the greatest impact on for-profit institutions and more expensive colleges and universities. Many of the programs in question are offered at local public colleges and universities at a much lower cost.
There were reports that some students were locked out of the FAFSA process. What was the issue and how has it been resolved?
Students with undocumented parents had the greatest challenge. Parents are required to create an FSA ID and those without social security numbers must complete additional steps to verify their identity. Due to technical issues, these parents were unable to complete this portion of the application until mid-March, and their applications faced lengthy processing times.