FAFSA mistake will be fixed but data further delayed

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The huge mistake on the new, redesigned FAFSA will be fixed, according to the Department of Education, but colleges won’t receive any student FAFSA information until sometime in March.

The new FAFSA that launched at the end of 2023 has a calculation error that would have resulted in most families qualifying for less financial aid than lawmakers intended. That error will now be corrected, but will further delay a process that is already months behind.

The FAFSA normally opens each year on October 1, and colleges receive information shortly thereafter, allowing them to provide financial aid offers to families. This year, however, colleges still have not received financial aid data from the government for families who have completed the FAFSA and as a result, have not been able to provide information to families waiting to understand what a school will cost.

The Department of Education now plans to provide student FAFSA information to colleges “in the first half of March,” giving itself time to fix the calculation error. However, that timeline will leave college financial aid administrators scrambling to process the information and in turn, provide financial aid awards to families ahead of the traditional May 1 decision date.

Without this fix, the Department of Education estimated the error would have cost families $1.8 billion.

The FAFSA formula takes parent income and assets, and student income and assets, and calculates a figure called the Student Aid Index (SAI) that colleges and the government use to award financial aid, including grants and scholarships that do not need to be repaid.

The calculation error would have produced a higher SAI than a family should have, resulting in lower aid eligibility.