Millions of potential and current college students fill out the Free Application for Federal Student Aid (FAFSA) every year. In 2020, Congress passed a law updating the FAFSA and the aid formulas for 2024, but the Department of Education’s (ED) release of the new FAFSA has been a fiasco.
Despite having three years to prepare, the new FAFSA suffered from two implementation hurdles smacking of negligence at best—and incompetence at worst.
First, for nearly two weeks, students couldn’t submit their FAFSAs. By law, the FAFSA must be available to students by Jan. 1, so ED released a mostly broken and largely unusable FAFSA. As Inside Higher Ed’s Katherine Knott and Liam Knox report:
The form, which officially opened Dec. 30, has only been available for extremely limited windows of time. Periodic ‘maintenance pauses’ locked students out for all but a few hours each day, and those who did manage to gain access to the form reported that they weren’t able to complete the application before being shut out.
Financial aid expert Mark Kantrowitz “said the site was more than frustrating—it was practically unusable.”
But Kantrowitz, who played a central role in launching the first-ever online FAFSA form in 1997, said he thinks something must have gone haywire at the department to make a last-minute scramble like the soft launch necessary after three years of advance notice. He was able to get a form up and running in nine months, he said, and that was when dial-up was still the primary mode of internet access.
“When you’re doing something this major and have approval from Congress years in advance, and you’re still not ready when the time comes, something must have gone very wrong,” he said.
What went wrong? According to the left, it’s the Republicans’ fault. Former Democratic staffer Bryce McKibben, who helped write the law, claims the Biden administration “inherited a mess, so that’s why I try to give [the Biden administration] some credit.” This is nonsense. The changes were signed into law on Dec. 27, 2020, with less than a month left in the Trump administration. In contrast, the Biden administration around three years to prepare. If you think both parties are culpable here, you’re either a perpetrator or victim of partisan gaslighting.
According to the right, what went wrong was misprioritization by ED, particularly the office of Federal Student Aid (FSA), which is responsible for the FAFSA. The Wall Street Journal editorial page suspects that “Richard Cordray, the Federal Student Aid chief operating officer, has prioritized implementing various loan forgiveness schemes. The FAFSA has been a side project, and it shows.” This is certainly plausible as FSA has been extremely active and creative in finding new ways to help students avoid repaying their loans, including counting non-payments as payments and trying to implement several loan forgiveness and new repayment plan schemes.
The second implementation issue is that ED also botched some of the calculations.
As Mark Kantrowitz explains, ED is supposed to update various exemptions and deductions for inflation, yet the new FAFSA fails to do so. Kantrowitz notes that inflation was “18.32% from April 2020 to April 2023” so failing to adjust for inflation means that “middle and high-income students will get thousands of dollars less financial aid than they would get with the inflation adjusted tables. Some low and middle-income students will lose eligibility for the Federal Pell Grant.”
The botched FAFSA rollout will hopefully lead to the implementation mess being cleaned up. But what should we make of the new FAFSA’s other changes?
I’m sure I’ll add more objections as more details emerge, but for now my leading objection is that the Expected Family Contribution (EFC) has been renamed as the Student Aid Index (SAI). ED is usually cagey about defining EFC for public relations reasons, but the actual meaning, which is how much the government thinks your family can afford to pay for college, matches closely to the phrase itself. That’s not the case for the SAI, which offends me not only on Orwellian doublespeak grounds but also because an actual student aid index should correspond to how much aid the student is eligible for, not how much their family can afford to pay—which is what the SAI will actually measure.
But there are also a couple of objections from those on the right that I don’t think have merit.
One is that the old FAFSA would determine how much a student—and their parents if dependent—could pay, but would divide that by the number people in the household in college. Thus, if a family had an EFC of $10,000, but two kids in college, then each student would have an effective EFC of $5,000. Under the new FAFSA, each student would have an EFC/SAI of $10,000, which will substantially reduce the amount of aid that families with multiple children in college will receive.
The Washington Examiner’s Timothy P. Carney goes so far as to argue that the new policy “discriminates against families with multiple children in college at the same time.” But it could just as easily be framed as the old FAFSA discriminating against families that spread their children out over time. Since I don’t think the government should influence whether families have kids close together in age or farther apart, the only way to be neutral on the matter is to determine an EFC/SAI per student, regardless of whether their college attendance overlaps with their siblings.
Another objection from the right is that some assets that were previously excluded from the FAFSA are now included. The Wall Street Journal editorial page laments that “The current FAFSA excludes assets of small businesses and family farms. No more. The new FAFSA will require families to report small business and farm assets, including land, buildings and machinery.” But to me, the new change is sound. Once the decision is made to tax assets for student aid determination, all assets should be treated the same to minimize government-driven distortions. I’m open to arguments that we shouldn’t be evaluating assets for aid purposes—it whiffs of a wealth tax—but as long as we are, we should be treating all assets the same.
Overall, the structural changes to the FAFSA are a step in the right direction. And once the Biden administration’s botched implementation is cleaned up, that’s what we’ll be left with.