The U.S. Department of Education has acknowledged an error in the calculation of financial aid for students entering secondary school next year. In an effort to rectify the issue, changes will be made to the Free Application for Federal Student Aid (FAFSA). However, experts caution that implementing the fix now might lead to delays in students receiving their financial aid offers.
A Failure to Adjust for Inflation
The error in question pertains to a failure to adjust the financial aid tables for inflation. These tables determine the amount of a student’s family income that should be “protected” and not considered available to pay for college expenses. Without the necessary inflation adjustment, a family’s spending power would have been inaccurately perceived as higher than it actually was.
The Fix and Its Implications
NPR reported that the fix for this error will apply to students entering the 2024-2025 academic year, although the exact timing remains uncertain. The Department of Education has yet to comment on the matter.
It is unclear when Education Department officials first became aware of the problem, but media attention began to focus on it late last year. As a result of the fix, students are expected to gain access to an additional $1.8 billion in federal student aid.
Student Financial Aid Administrators Respond
While financial aid administrators agree that rectifying the error is the right course of action, they express disappointment that the adjustment was not made earlier. Justin Draeger, president of the National Association of Student Financial Aid Administrators (NASFAA), stated that the fix “should have been done from the beginning.”
NASFAA further explains that the implementation of the fix at this stage of the financial aid processing cycle will result in either further delays in financial aid offers or the provision of incorrect applicant data before future reprocessing. Draeger warns that students will bear the consequences in the form of compressed decision-making timelines and additional delays in financial aid offers.
Impact on Pell Grant Recipients
While the income-adjustment tables guide many colleges and states in determining financial aid offers, they do not affect aid amounts for students who automatically qualify for a maximum Pell Grant. According to the Education Department, over 75% of Pell Grant recipients receive the maximum grant, which includes a majority of students with low incomes. Consequently, these tables will not impact their eligibility for the Pell Grant.
For more information about this FAFSA form error and its resolution, visit the source link.
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