Colleges are slated to receive the information needed for making critical financial aid decisions months behind schedule due to problems with the Free Application for Federal Student Aid (FAFSA) process this year.
Caused by a series of issues, this FAFSA delay is expected to affect over 17 million students trying to make plans for the 2024-2025 academic year. Many students will be finding out how much aid they qualify for months later than they normally would.
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Many people consider May 1 to be College Decision Day, so the delay creates a tight decision timeline for anyone relying on aid determination to select a school. Here’s what you need to know about what it may mean for you.
The latest delay for the 2024-2025 FAFSA is the result of errors in updating the indexing formula for the Student Aid Index (SAI), a figure used to determine how much aid students qualify for. Starting with the 2024-2025 school year, the SAI replaced the Expected Family Contribution calculation and is supposed to reflect cost changes by adjusting for inflation.
However, in its initial calculation, the Department of Education didn’t account for inflation. Without that adjustment, students would be qualifying for much less assistance. The fix is estimated to open up an additional $1.8 billion in student aid.
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With the correction in the works, the Department of Education plans to start sending information about students’ financial aid eligibility to schools in the first half of March. Schools will then need time to process that information and send award letters to students.
If you’re affected by the FAFSA delay, you should communicate with schools, look into other funding options, and create a backup plan to stay prepared. For many families, federal student aid is a critical factor, primarily for entering freshmen making college decisions. If you’re waiting to find out what aid your student will qualify for, there are some steps you can take to make the process go as smoothly as possible.
Ensure that any schools your child might be planning to attend understand that you are waiting to hear from them regarding the FAFSA. Each school may have its own plan for how to navigate the financial aid uncertainty, including offering payment plans or institutional aid.
If your student’s enrollment is contingent on the financial aid they receive, be sure to let the school know.
Although some schools may choose to push back their internal deadlines, you may not have the full federal financial aid picture before it’s time to accept enrollment offers. Although federal student aid is often the best choice when it’s available, you may want to consider other education funding routes, such as private loans or the vast number of merit scholarships based on students’ interests and qualities.
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These options won’t involve favorable payment plans or forgiveness options available to public borrowers, but they could make the difference between being able to pay your college bills or not. A financial advisor may be able to help you explore this route.
The current delay has an impact on all college students using financial aid to fund their education, particularly the students starting or changing schools. Depending on how much of a factor financial aid plays in your college decision, it may be a good idea to have a backup plan if the delay and uncertainty are putting too much pressure on your family.
Rather than pushing to enroll in their dream college this fall, your student may benefit from:
- Looking at other schools. It may be worth it to explore a less expensive college or one that can provide institutional-based aid not tied to the student’s needs, such as scholarships.
- Attending community college for a semester or year. This may reduce tuition costs as well as living expenses if your student is still living with you.
- Delaying enrollment. Starting school with the added stress of not knowing how funding is going to work out could be especially distracting for some students. Some institutions will allow you to delay starting until spring. By then, you should know exactly what your aid award will be.
All of these options can lessen the impact of the FAFSA delay by reducing your reliance on federal aid.
As you navigate college enrollment amid the FAFSA delay, stay aware of the latest updates and remain patient as the Department of Education and schools work through the issues. Stay in contact with prospective schools and have a strategy in mind.
You’ve worked hard to financially prepare your student. Consulting with a Thrivent financial advisor can help you find ways to keep your educational savings strategy flexible so it sees you through from the first day of college to the last.
Source: https://t-tees.com
Category: WHY
