April FAFSA Update - 4 More Issues Causing Delays

As we’ve highlighted earlier in the year, the new FAFSA system was inundated with an overload of applications, which could cause delays in the typical season. Just last week, the Department of Education announced new issues, which could mean students may not see their award letters as soon as initially intended. Today on the blog we want to provide an update on these issues and what it could mean for kids going to college next year.

Let’s take a deeper look at what’s going on in the world of FAFSA this spring.

Backlog Processed…but…

The DOE Tracking report has stated that most of the backlog has been processed. Good news. The submitted FAFSAs total around 6.7 million, with about 6.6 million that have been processed. There were fears that these forms would not be processed in enough time to keep up with the intended deadlines for schools to receive data needed to award financial aid. Schools receive this data in what’s known as an ISIR, or Institutional Student Information Record. 

Now the bad news. Schools have noticed that some of the ISIR records have errors, which means there could be more errors to come.

Unfortunately, due to the accelerated period that schools received this data, they have not had time to discover all of the issues. This means award letters could be delayed further. Here are a few of the errors that have been found thus far.

FAFSA Issue 1- Educational Tax Credit did not always match the IRS-reported number

According to the DOE, they have fixed this issue for FAFSAs submitted after 3/30, but this problem affects roughly 15% of applicants. The DOW plans to reprocess the records that found the error, which will reduce those students’ financial amounts. This is estimated to impact roughly 5% of FAFSA submissions.

The DOW has put its trust in the school to identify the corrected FAFSA and use its judgment to professionally resolve the issue. More info will be coming soon on this from the DOE. Colleges are legally responsible for following DEO financial need rules, so they may not be too confident to issue award letters that feature this error in the ISIR information. 

FAFSA Issue 2- Adjusted Gross Income incorrectly transferred on ISIR for those who filed amended returns.

Tax information is transferred from the IRS to the FAFSA. This is done through what is known as the DDX system, which is a new integration, formerly used was the DRT system. With the new system, the amended AGI was transferred, but other tax information was based on the original tax filing which created inconsistencies. So, because of these inconsistencies, there is an error in the Student Aid Index. 

Under the old system, a flag was used to identify when amended returns were submitted, which will not be available with the new system for the 24-25 FAFSA processing. Thankfully, this amended return problem only affects about 2% of the FAFSA submissions, but it will put extra work on the college financial aid offices to scramble once the DOE reprocesses those whose SAI will be negatively affected. 

FAFSa Issue 3- Manually Submitted Tax Info did not match tax info on file. 

This issue is said to not affect too many students, but essentially it was difficult for some applicants to obtain an FSA ID for manual submissions. In place of an FSA ID, some FAFSA contributors were given Universally Unique Identification Numbers (UUIDs). Some states and institutions will be given a list of those contributors for their population. It will also be up to the state or school to identify and process this change. 

FAFSA Issue 4- Ability for both Student & College to make FAFSA changes

The ability to make changes to the FAFSA has yet to be made available. No specific date has been provided by the DOE, which initially announced the correction function would be available by the end of March. As of the last reports available, the DOE had pushed back the date until early April. 

For colleges, it will be after the students can make corrections, with no date provided as of yet. 

This will affect the school’s ability to make adjustments in the appeal process. 

In Conclusion

This can be very frustrating for students and parents who are being forced into these issues without having any control over the situation. This FAFSA simplification has been anything but simple. We understand your frustration and are doing everything we can to assist students and parents through this confusing era of FAFSA. We can assume that once the kinks are worked out this year, it should become more normalized and controlled in the years following. If you have any questions regarding FAFSA or financial aid, please don’t hesitate to reach out to speak with one of our college planning experts today.