Colleges won't receive FAFSA data until March | Here's what that means for students

Colleges won't start receiving students' financial aid data from the Free Application for Federal Student Aid, known as the FAFSA, until the first half of March - more than a month later than expected.

The delay, announced by the Department of Education last week, is likely to frustrate students who are waiting to hear how much they will receive from colleges before making a decision about where to enroll in the 2024-25 academic year.

Typically, students receive financial aid award letters from schools in March and are expected to commit to a college by May 1. But now that timeline is in jeopardy.

RELATED: New FAFSA is out. Here's what you need to know to get financial aid for college

The Department of Education recently made major changes to simplify the FAFSA, as required by Congress. The updated form was released on December 30 and was expected to make more students eligible for aid, but the rollout has been bumpy.

Last week, the Department of Education said it would make a last-minute fix to tie the new financial aid calculation to the latest inflation data.

The adjustment will make $1.8 billion more in financial aid available to students. But it's one of the factors contributing to the processing delay, a senior Education Department official said on a call with reporters Tuesday.

"I want to emphasize that this is not just a new form. It's an entirely new formula, process and software - not just on our part, but on the part of schools as well. These are really unprecedented changes," the official said.

The department's Federal Student Aid office is charged with not only administering the FAFSA, but has also overseen the restart of federal student loan payments after a yearslong, pandemic-related pause. In 2022, the Biden administration requested additional funding to handle the bigger workload, but Congress left its budget the same as the year before.

With the new FAFSA data delay announced Tuesday, colleges will have less time than usual to develop financial aid awards or will have to push back their acceptance deadlines.

"With this last-minute news, our nation's colleges are once again left scrambling as they determine how best to work within these new timelines to issue aid offers as soon as possible - so the students who can least afford higher education aren't the ones who ultimately pay the price for these missteps," Justin Draeger, president of the National Association of Student Financial Aid Administrators, said in a statement Tuesday.

What is the FAFSA and how has it changed?

The FAFSA determines eligibility for federal Pell Grants and federal student loans - and in most cases, the financial aid provided by colleges as well.

The form has long been due for an update, and the new version released at the end of last year is a culmination of changes approved by Congress in 2019 and 2020.

In previous years, the FAFSA could be as long as 108 questions. With the new form, some applicants will have to answer as few as 18 questions, which would take less than 10 minutes to complete, according to the Department of Education. Some information is now directly taken from a filer's tax return so that the applicant doesn't have to hunt down numbers on old tax returns.

With the new FAFSA, an increased number of families is expected to be eligible for financial aid.

In fact, the Department of Education estimates that 610,000 more students will qualify for a Pell grant on an annual basis. The Pell grant program is a key way the federal government helps students from low-income families go to college by providing eligible students with money they don't have to pay back.

And an estimated 1.5 million more students will be eligible for the maximum Pell grant amount, which typically changes each year. The Pell grant is worth up to $7,395 during the current school year.

Problems and delays

Usually, the FAFSA is available for families and students on October 1 each year, but the overhaul of the form had already pushed back the release date by roughly three months.

The Department of Education was required to release the new version by the end of 2023, and while it met that deadline, the form was only available sporadically, for about 30 minutes at a time, for the first two days. It was not made available 24 hours a day, seven days a week until January 8.

So far, more than 3.1 million FAFSA forms have been successfully submitted, the Department of Education said Tuesday.

But students and families have experienced a number of glitches with the new form. Parents who don't have Social Security numbers, for example, are currently having problems starting a form for a student or contributing to one their child already started - even though they should be allowed to create an account with Federal Student Aid and access the form.

Last week, a group of Republican lawmakers sent a letter to the Government Accountability Office asking for an investigation into the Department of Education's handling of the FAFSA rollout.

"Repeated delays from the Department of Education ... in rolling out the new FAFSA have left students and schools in limbo for the upcoming school year," wrote the lawmakers.

On Tuesday, Republican Sen. Bill Cassidy, ranking member of the Senate Health, Education, Labor and Pensions committee, called the FAFSA rollout a "disaster."

"These unacceptable delays from the Biden administration creates the real likelihood that many students will forgo college because they cannot choose a school without knowing their eligibility for student aid," Cassidy said in a statement.

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