Remember Murphy’s Law? It’s the adage that “Anything that can go wrong will go wrong, and at the worst possible time.” The development and rollout of the “Better FAFSA” by the U.S. Education Department (ED) is a prime example of Murphy’s Law in action.
In a normal year, the FAFSA goes online on October1. Students and, for those who are dependents, their parents, fill it out and submit it to the ED. Then the Department computes how much Federal aid a student is eligible to receive through loans, grants, and the work-study program and transmits this information, normally within two weeks of FAFSA submission, to student-designated colleges by means of an Institutional Student Information Record (ISIR). The college then produces and sends admittees an Award Letter, which explains how much money from Federal and state programs and the college itself that they are eligible to receive. Because students are motivated to submit the form soon after it becomes available, the majority of completed FAFSA’s are submitted and processed in October and November, so colleges have ISIR’s for many students even before they receive applications from them.
This year, the ED’s revision of the FAFSA form has caused extensive problems for colleges. This has impaired and delayed the ability of colleges to produce Award Letters. As of mid-April, the ED has processed 8 million FAFSA forms, but only about half of them have been reported to colleges on ISIR’s.
Award Letters are usually sent out in late March or early April, giving students adequate time prior to college enrollment deadlines to choose which school to attend from among those that admitted them. A student’s choice of a college often depends heavily on the amount of financial aid that he or she will receive. But most students still don’t have information on the net cost of colleges when they need it most—in time to identify the best school for them and enroll in it.
The dilemma facing students and families is due solely to the delay-ridden and problematic rollout of the new FAFSA by the ED. The Administration had over 3 years to effect the transition and yet failed to do so.
Many congressmen and student aid advocates assert, correctly, that the ED has done a deplorable job on the new FAFSA. Arise from overriding problem of being three months late, critics point out that the newly released FAFSA is rife with other problems, including:
- Instead of October 1, students couldn’t access the form on the ED’s website until January 8 and some had difficulty even after that.
- The ED’s help line was seldom available.
- Students with no social security number for themselves or a parent were denied.
- The FAFSA eligibility calculation did not account for inflation from 2020 to 2023, which was 18%, so many students were incorrectly considered ineligible.
- Students eligible for Pell Grants have been denied because they are dependents.
- The IT contractor, General Dynamics Information Technology, hired by ED to rebuild the FAFSA platform, complained about a shifting statement of work. They repeatedly missed key deadlines.
- The data that the IRS contributed to the FAFSA process were inconsistent. In some cases, this led to students being awarded more aid than they are eligible for and in other cases, less.
How Did This Happen?
How did a bipartisan, long-term effort to simplify the Federal student aid process become a dysfunctional nightmare? According to Adam Harris, writing Atlantic Magazine (April 16):
“The new FAFSA rollout did not have to be this way. The Biden administration could have focused on making sure that FAFSA worked, though it would likely have had to punt on other priorities, such as student-debt relief. And that may have made a good deal of sense: After all, changing higher-education regulations and canceling debt won’t help students if they can’t figure out a way to pay for school in the first place…
The FAFSA-overhaul process was flawed from the beginning, and the ways that the administration’s ambitious agenda, plus a trail of missed deadlines, communication breakdowns, and inadequate funding, have led to a massive disruption in higher education. All of this could have been avoided, but now it must simply be managed.”
Harris opines that asking 100 insiders will get 100 different explanations for how and why things went wrong., but they all have the same starting point in common. On December 27, 2020, then-President Donald Trump signed the Coronavirus Response and Relief Supplemental Appropriations Act into law. This omnibus bill included the most significant revision to Federal student financial aid since 1992; the FAFSA Simplification Act of 2020 (the Act). The Act authorized a reduction in the number of questions on the form from 108 to 36, but the changes weren’t limited to the form. It also changed eligibility formulas to raise the amount of aid that many students could receive.
The FAFSA project was ill-fated from its inception due to the contributing factors below:
- At the start of 2021, the FSA already had several major ongoing projects, including the updating of its interface with ED’s loan services providers, and was still focused on pandemic recovery
- The project necessitated a complete replacement of the obsolete, 28 year-old legacy system with state-of-the-art technology. This was not budgeted or scheduled.
- The Biden Administration came with its own agenda regarding student loan forgiveness plans that required resources that had not been budgeted and close attention from senior management of the ED.
- The workforce of the agency within the ED that was to perform the project, the Federal Student Aid (FSA) office, was severely depleted by 2020 at the end of a four-year Administration perceived as being opposed to public education.
By March, 2021, it was already clear that the Act’s timeline to revise the FAFSA was too optimistic. Accordingly, ED management asked for additional time to complete the task. In June, Congress granted a one-year extension. But IT consultants and FSA staffers argued that one year would not be enough. Between the lack of manpower, the complexity of IT development, and ongoing projects, the felt that at least two more years would be needed to rebuild the database, change the aid formulas, determine the right questions for the form, get public comments, and test the system to ensure that it was ready before rollout.
As is often the case in systems development, it was the testing process that was short-changed. ED management was behind on the schedule set by Congress and were anxious to launch the new FAFSA. Legislators were eager to get the new FAFSA online because it had been promised to constituents for quite some time.
Political people do not understand the challenges of IT development, just as IT people don’t understand politics. The FSA was flat-funded every year. Republicans viewed additional funding as unnecessary. Democrats , who are usually supportive of the ED, were unwilling to add funding because many wanted to transition away from the current system that simply finances sky-high tuition rates. Despite the lack of new funding, political officials continued to set deadlines that FSA staffers and the contractor knew couldn’t be met. Ultimately, the ED was forced to announce in late summer, 2023, that the FAFSA wouldn’t be available on October 1, but they committed to having it online by the end of the year.
Robust testing would have revealed problems with the version of the FAFSA that was to be rolled out. As a general rule of IT systems implementation, the more operations and human interventions that a new system has, and the FAFSA system had plenty of both, the more testing it needs. The FAFSA was rushed into service by the ED without sufficient testing.
Had this year’s FAFSA rollout gone smoothly, many more students would already have their Award Letters and committed to a college, knowing that they could afford it. At this time last year, nearly 10 million FAFSA’s had been submitted. On average, about 17 million FAFSA’s have been submitted in each FAFSA cycle in recent years. But by mid-April, the number of students submitting the FAFSA was down significantly. The National College Attainment Network (NCAN) expects 3 million fewer FAFSA-filers this year than last.
NCAN is skeptical that all missing filers will submit the FAFSA in time to start college this fall, although there’s still plenty of time to do so. After all, not all high school graduates are determined to attend college. Many are weighing whether to continue their education or take a job. They may be more inclined toward the immediate benefits of a job if they don’t know the real cost of college. Colleges are also seeing what is likely to be a surge in requests for a Gap Year from admittees.
Long term, college administrators expect the new FAFSA to be a huge improvement over the old one. Low-income students will get more aid and many more students will be eligible for grants. Some feel it will be worth the crush of problems this year, even though will come at the cost of a college education for millions of students in the high school class of 2024 and others.
The next post will focus on examples of the impact of the FAFSA crisis on individual students.
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