Education Department delays major student aid overhaul
Officials at the Education Department said that the Biden administration strongly supports the policy of making the FAFSA easier for students. But they said that transitioning to a brand new FAFSA was complicated by antiquated systems at the agency.
Rich Cordray, the chief operating officer of Federal Student Aid, which is responsible for implementing the changes, said in a blog post set to be published on Friday that his office was “hard at work modernizing the FAFSA system.”
“To deliver on these new opportunities, FSA first needs to update the technology system that the FAFSA form is built on,” Cordray added. “Believe it or not, the current system is 45 years old, and though we have made it work all these years, it’s just too limited to support these new changes.”
Republicans and Democrats overseeing education policy on Capitol Hill are negotiating over a legislative fix that would give the Education Department more time to implement the new FAFSA.
Department officials said they are providing technical assistance to lawmakers who are working on a legislative deal to extend the deadline. But they said they had not formally proposed specific language to Congress.
Rep. Virginia Foxx (R-N.C.), the top Republican on the House Education committee, will back legislation to give the Education Department more time to implement the FAFSA changes, a spokesperson confirmed to POLITICO.
“We expect bipartisan agreement on this delay because this is nothing more than a technical fix,” the spokesperson said. “We are eager to see the Biden administration’s Department of Education step up and make these necessary improvements for future students and borrowers.”
A Democratic aide on the committee, which is led by Rep. Bobby Scott (D-Va.), said that lawmakers “are working on a bipartisan plan that will give FSA the flexibility it needs to effectively implement these important changes to the FAFSA.”
The change to the federal financial aid formula that Congress approved is expected to allow the Education Department to reduce the FAFSA from 108 questions to 36 questions.
Education Department officials also emphasized that in the coming months they will be carrying out other changes to student aid that Congress passed last year ahead of schedule. Cordray said in the blog post that students would start seeing those changes by Oct. 1.
For example, the department said that it would implement in the coming months a provision in the law that repeals the limit on how long borrowers could attend school without accruing interest on their need-based federal student loans.
Other provisions in the law eliminates the requirement that male students register with the Selective Service before they receive federal student aid and removes restrictions on students with drug convictions receiving aid. Both of those new policies will be in place starting in the coming months as well, according to the department.
While the questions regarding Selective Service and drug convictions will remain on the FAFSA until the 2023-24 school year, the department will not factor the answers that students provide when determining their eligibility for aid, officials said.
Justin Draeger, president of the National Association of Student Financial Aid Administrators, praised the early implementation of those provisions but lamented the postponement of the new FAFSA. He said in a statement that the group was “disappointed that some changes that will benefit students will be delayed for one additional year, until the 2024-25 school year.”
Draeger added that it was important for the Education Department to move quickly but also carefully on implementing the sweeping changes to the student aid application process.
“These changes cannot come soon enough,” he said. “But of equal importance is that changes to the form be done in an orderly way to ensure there are no disruptions to the application cycle for students or schools.”
Kim Cook, the executive director of the National College Attainment Network, which represents groups working to help underrepresented students apply for and attend college, echoed those concerns.
“The news of the delay of full implementation of FAFSA simplification is disappointing, as the urgency for students to access need-based aid has only grown since passage of this legislation,” Cook said in a statement. “We appreciate that these sweeping changes require attention to detail and upgraded systems to improve, not complicate, the process for students. We will continue to advocate and work with FSA and Congress to strike that balance.”
The Education Department’s implementation of the FAFSA changes is happening in tandem with another law that Congress passed in 2019 to allow the agency to more easily receive taxpayer information of student aid applicants and borrowers directly from the IRS.
The bipartisan data-sharing law, known as the FUTURE Act, is meant to allow the Education Department to determine a student’s eligibility for financial aid by automatically verifying family income information directly from the IRS.
That laws did not set a specific deadline for implementation, but department officials said on Friday that the automatic data-sharing feature would not be available on the FAFSA form until the streamlined FAFSA debuts in 2024-25. Until then, borrowers can continue to use the Data Retrieval Tool which directs families to an IRS website from which they can import their tax information into the FAFSA.
The data-sharing under the FUTURE Act is also meant to allow federal student loan borrowers to automatically enroll in and remain enrolled in income-based repayment programs without having to provide documentation of their income information.
The department declined to say when it would begin using the IRS data-sharing law for income-based repayment programs or other student loan purposes.
The Biden administration’s budget request for the coming 2022 fiscal year starting Oct. 1 seeks nearly $195 million to implement the sweeping changes that Congress has made to student aid in recent years — a nearly 90 percent boost from the previous year.
The money will help pay for technology and a modernization of back-end systems that process applications from students seeking financial aid or from borrowers seeking to enroll in income-based loan programs.
Some of the proposed funding will help the Education Department work with colleges, states and scholarship organizations to update their own systems to accommodate the new FAFSA, according to the department.