College aid officials warn FAFSA mess will delay many grant and loan offers until May

Leaders of the college financial aid system assailed the Education Department over this year’s FAFSA debacle, warning that ongoing delays are extending institutions’ timelines for offering packages that many students’ decisions hinge on.

“If there was a financial aid director or even a college president that delayed financial aid on their campus for up to six months, the professional price that would be paid for that would be pretty steep,” Justin Draeger, head of the National Association of Student Financial Aid Administrators, told lawmakers on Capitol Hill on Wednesday.

The hearing by the GOP-led House Subcommittee on Higher Education and Workforce Development came one day after Education Department officials disclosed that at least 30% of the Free Application for Federal Student Aid (FAFSA) forms submitted so far this year could contain errors resulting from widespread application glitches or other issues.

Those forms are set to be reprocessed in coming weeks, and many will start being sent to schools by May 1, the agency said.

The federal government can typically turn around FAFSA information within days, but the lags this year have extended for months. Colleges and universities are already well behind schedule due to the botched overhaul of the application process — one that was meant to be easier and in many cases more generous, but has instead landed millions of households and campus officials in bureaucratic limbo.

“It’s not a trivial task to roll this out, but this rollout has been disastrous and, frankly, inexcusable,” Rep. Brandon Williams, R-N.Y., said Wednesday.

The hearing signaled growing bipartisan frustrations over the FAFSA chaos, much of it focusing on the Education Department, which Draeger said faced a “crisis of credibility.”

Agency leaders didn’t testify at Wednesday’s hearing, but a spokesperson said Tuesday that officials have identified and fixed errors in the online application system “affecting the accurate processing of large numbers of FAFSA forms.”

A Department of Education spokesperson acknowledged that “implementing this new system has brought certain challenges” but pushed back on lawmakers’ criticism, saying it “has prioritized the overhaul of the FAFSA form and has been moving full speed to implement the bipartisan law to make this experience far better” for applicants. “We will continue to listen and be responsive,” the spokesperson said.

The department estimates roughly 7 million applications have already been submitted and sent off to schools and scholarship organizations, though some may need to be reprocessed. In the meantime, it said it has returned to normal FAFSA processing times of one to three days.

Also on Wednesday, Sens. Elizabeth Warren, D-Mass., and Ron Wyden, D-Ore., sent a letter to the chief of General Dynamics, the military contractor that oversaw the FAFSA refresh under a nine-figure deal. They demanded more information on the project and accused the company of a “near-total failure” that they said is “harming millions of students and hundreds of colleges.”

General Dynamics didn’t comment.

FAFSA is a critical first step for many schools and scholarship programs to calculate the additional aid they offer students beyond what the federal government may provide. The holdups have already forced households to make tough decisions. Some have slashed retirement savings to free up tuition money, while others are putting down deposits at cheaper safety schools rather than holding out for more support from prestigious four-year colleges.

Even if reprocessed FAFSA forms are sent to schools in coming weeks, many institutions will need at least two more to turn around their own aid packages, Mark Kantrowitz, a student financial aid expert, testified Wednesday. That means some aid offers might not reach students until after the traditional May 1 decision deadline — or even beyond those that have been extended further to deal with the fallout.

Schools are taking different approaches to handling the delays. Some are sending out estimated aid offers, while others are holding off altogether for now.

The University of North Carolina at Chapel Hill has yet to send out a single financial aid package because of the “poor quality of the data and the late receipt” of students’ FAFSA information, Rachelle Feldman, the school’s vice provost for enrollment, told lawmakers. The school, which enrolled over 32,000 students last fall, is hoping to distribute aid offers by the first week of May — months behind its typical time frame of January to March.

FAFSA completion rates were down 40% as of March 29 compared to the same period last year, according to the National College Attainment Network. Congress estimates that FAFSA complications have affected 18 million students looking to attend college next year.

“Most high school seniors have yet to receive an aid offer,” NCAN chief Kim Cook said Wednesday, adding that low-income and minority students are lagging behind the national FAFSA submission rate.

Many are still “being asked to commit by May 1,” she said. “Our greatest fear is that they will decide they can’t.”