Federal FAFSA glitches could impact colleges fall enrollment

May is traditionally when colleges gain clarity about their incoming classes. This year, those enrollment projections have a big asterisk.

That’s because the number of federal-aid applications is significantly lower than in past years,  leading to fears that fewer students will go to college at all this fall.  The numbers are down because the delayed and botched rollout of the the Free Application for Federal Student Aid, or FAFSA, application by the U.S. Department of Education.   

The recent overhaul of the FAFSA, mandated by a 2020 law, was intended to simplify and expedite the application process to make it more user-friendly. This overhaul, however, was not completed in time for the usual college admissions cycle. The new form was finally introduced in January, but technical issues have plagued the application process since its debut.

The FAFSA application is a critical requirement for students seeking Pell Grants, federal student loans, and federal work-study dollars. Many colleges and states use FAFSA information to determine institutional aid offers. However, the recent overhaul of the FAFSA, intended to simplify and expedite the application process, has resulted in widespread disruption and uncertainty for students and colleges alike.  

Instead of issuing financial-aid offers alongside admission decisions in early spring, many colleges have had to adapt, often without knowing how much aid they can offer incoming students. This improvisation has created significant uncertainty about fall enrollment numbers, posing potential risks for institutions reliant on tuition revenue.

 

"Admissions offices are a little scared to believe their own numbers," said David A. Hawkins, chief education and policy officer at the National Association for College Admission Counseling (NACAC). The uncertainty could disrupt students' educational paths and lead to enrollment and budget shortfalls, especially at tuition-dependent colleges.

 

Colleges dependent on enrollment to pay their bills could be in a bind

Every year, about 17 million students submit the FAFSA as part of their applications for financial aid. So far, this year, 5.5 million students have been able to fill out the new FAFSA form, according to the  U.S. Dept. of Education, because of the systems glitch.  

 

HBCUs, and other colleges/universities with high proportions of low-income and minority students are experiencing the greatest decline in aid applications. Compounding the issue, the Education Department has faced challenges in providing accurate calculations to colleges, even when students submit their forms.

As is often the case, public flagships and selective institutions with plenty of financial aid are likely to see little impact from the situation, said Robert Kelchen, a professor and the head of the department of educational leadership and policy studies at the University of Tennessee at Knoxville. Small, nonselective private colleges and community colleges could suffer the worst outcomes and even be forced to close if the numbers don’t work out.

 

In response, many colleges have extended the traditional May 1 deposit deadline. According to NACAC, 60 percent of its 514 members are offering students more time to decide, while 15 percent are allowing extensions on a case-by-case basis. Some institutions have also sent estimated aid packages based on their own calculations, rather than waiting for federal data.