Education Department Identifies Vendor Error Impacting FAFSA


The Department of Education disclosed on Friday a vendor’s miscalculation affecting hundreds of thousands of financial aid applications, potentially prolonging the processing of aid awards and causing uncertainties for students planning their college choices for the upcoming year, cautioned financial aid experts.

The latest setback compounds the challenges of this year’s FAFSA (Free Application for Federal Student Aid) process, which has been marred by delays and technical glitches following the release of an eagerly awaited updated version of the financial aid form.

Impact on Students and Resolution Measures

Students traditionally await financial aid award notifications from colleges before finalizing their enrollment decisions for the next academic year. However, colleges rely on government-transmitted FAFSA information to send out these notifications. The Education Department‘s recent error resulted in incorrect financial need information being sent to colleges prior to March 21, affecting a subset of Institutional Student Information Records (ISIRs).

While the majority of ISIRs were unaffected, the Department has issued guidelines for colleges to process impacted ISIRs and generate provisional aid packages for students. The error, attributed to a vendor issue, predominantly affects dependent students reporting personal assets on the FAFSA. The Department assured that the issue has been rectified for ISIRs transmitted on or after March 21, with ongoing efforts to deliver pending ISIRs to colleges.

Overview of FAFSA Challenges and Changes

The FAFSA overhaul, mandated by law and introduced by the Education Department late last year, aimed to simplify the application process and expand eligibility for financial aid programs. However, technical hurdles marred its implementation, delaying the availability of the form and complicating processing.

Despite subsequent adjustments to expedite processing and enhance accessibility, the rollout has faced criticism from lawmakers and scrutiny from oversight agencies. The Department’s endeavors to streamline the process notwithstanding, challenges persist in ensuring a smooth transition to the updated FAFSA.

The revamped FAFSA, boasting fewer questions and drawing information directly from tax returns, is anticipated to broaden access to Pell grants and other financial aid opportunities for millions of students annually, aligning with the objective of facilitating higher education affordability and accessibility.