How the Education Department’s FAFSA Fix Will Benefit Students
The Free Application for Federal Student Aid (FAFSA) is a crucial form that millions of students fill out every year to get financial aid for college. However, this year’s FAFSA had a major error that would have reduced the amount of aid that many low-income students would receive. Fortunately, the Education Department has announced that it will correct this mistake and make an additional $1.8 billion available in financial aid for the 2024-25 academic year. Here is what you need to know about this issue and how it will affect you.
What was the FAFSA mistake?
The FAFSA mistake was related to how the form calculates the expected family contribution (EFC), which is the amount of money that a student’s family is expected to pay for college. The EFC is based on several factors, such as income, assets, family size, and number of children in college. The lower the EFC, the more aid a student can get.
However, this year’s FAFSA used outdated inflation data to adjust the income and asset thresholds that determine the EFC. This resulted in some students and families appearing to have more income and assets than they really did, which increased their EFC and reduced their aid eligibility. According to NPR, this mistake would have cost students $1.8 billion in federal student aid, as well as affecting state and school-based aid that relies on the FAFSA data¹.
How will the Education Department fix the FAFSA mistake?
The Education Department said that it will fix the FAFSA mistake by using the correct inflation data to recalculate the EFC for the 2024-25 award year. The department also said that it will update the FAFSA website and app to reflect the changes, and that it will communicate with students, families, and schools about the revised EFC and aid amounts².
The department did not provide a specific timeline for when the fix will be implemented, but it said that it will be done in time for the 2024-25 award year, which starts on July 1, 2024. The department also said that it will not affect the current 2023-24 award year, which is based on the previous FAFSA version².
How will the FAFSA fix benefit students?
The FAFSA fix will benefit students by ensuring that they get the amount of aid that they deserve based on their financial need. The fix will especially help low-income students, who are more likely to qualify for need-based aid such as Pell Grants, subsidized loans, and work-study programs. According to the Education Department, the fix will make $1.8 billion more available in federal student aid for the 2024-25 award year, which could make a significant difference for many students who are struggling to afford college².
The FAFSA fix will also benefit students by simplifying the application process and making it more accurate. The new FAFSA version that was launched in December 2023 has reduced the number of questions from 108 to 36, and has eliminated some confusing and redundant questions. The new FAFSA also uses tax data from two years ago, instead of one year ago, which makes it easier for students and families to fill out the form and reduces the need for verification and corrections. The new FAFSA also aims to give more access to federal aid to more lower-income families, such as those who receive public benefits or have negative income³.
What should students do to get the most out of the FAFSA fix?
The most important thing that students should do to get the most out of the FAFSA fix is to fill out the form as soon as possible. The FAFSA for the 2024-25 award year opened on October 1, 2023, and will close on June 30, 2025. However, some states and schools have earlier deadlines, and some aid is awarded on a first-come, first-served basis. Therefore, students should not wait until the last minute to submit their FAFSA, as they may miss out on some opportunities for aid⁴.
Another thing that students should do to get the most out of the FAFSA fix is to check their Student Aid Report (SAR), which is a summary of the information they provided on the FAFSA. The SAR shows the EFC and the estimated amount of federal aid that a student can get. Students should review their SAR carefully and make sure that there are no errors or inconsistencies. If there are any changes or corrections that need to be made, students should contact their school’s financial aid office or the FAFSA help center⁵.
Finally, students should compare their financial aid offers from different schools and make an informed decision about where to enroll. Financial aid offers may vary depending on the cost of attendance, the availability of funds, and the policies of each school. Students should look at the types and amounts of aid that each school offers, such as grants, scholarships, loans, and work-study. Students should also consider the net price, which is the amount of money that they will have to pay out of pocket or borrow after subtracting the aid from the cost of attendance. Students should choose the school that best fits their academic, personal, and financial goals⁶.
Conclusion
The FAFSA is a vital tool that helps millions of students get financial aid for college. However, this year’s FAFSA had a serious error that would have reduced the aid for many low-income students. The Education Department has announced that it will fix this error and make $1.8 billion more available in federal student aid for the 2024-25 award year. This fix will benefit students by ensuring that they get the aid that they need and deserve, by simplifying the application process and making it more accurate, and by giving them more options and information to choose the best school for them. Students should take advantage of this fix by filling out the FAFSA as soon as possible, checking their Student Aid Report, and comparing their financial aid offers from different schools. By doing so, they can make their college dreams a reality. 🎓
Source: Conversation with Bing, 1/26/2024
(1) Exclusive: The Education Department says it will fix its $1.8 billion FAFSA mistake. https://www.wuwm.com/term/education/2024-01-23/exclusive-the-education-department-says-it-will-fix-its-1-8-billion-fafsa-mistake.
(2) Education Department’s FAFSA inflation fix will free up $1.8 billion more aid for students. https://www.msn.com/en-us/money/careersandeducation/education-departments-fafsa-inflation-fix-will-free-up-18-billion-more-aid-for-students/ar-BB1hc4PJ.
(3) Department of Education makes another fix to the FAFSA, unlocking an additional $1.8 billion in financial aid. https://www.yahoo.com/news/department-education-makes-another-fix-185159083.html.
(4) Exclusive: The Education Department says it will fix its $1.8 billion …. https://www.opb.org/article/2024/01/23/exclusive-the-education-department-says-it-will-fix-its-1-8-billion-fafsa-mistake/.
(5) Exclusive: The Education Department says it will fix its $1.8 billion …. https://www.bpr.org/npr-news/2024-01-23/exclusive-the-education-department-says-it-will-fix-its-1-8-billion-fafsa-mistake.
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