Key takeaways

  • The Department of Education identified a series of technical issues, which impacted about 30 percent of FAFSA forms.
  • These issues created inaccuracies within students' reports, preventing financial aid officials from sending accurate aid packages.
  • As of May 1, 2024, the Department of Education has reprocessed “nearly” all affected applications, encouraging colleges to send aid offers as soon as possible.

The Department of Education announced that it had completed reprocessing “nearly all” FAFSA records impacted by a series of technical issues, which could have resulted in inaccurate results. This comes a month after the department first issued a statement acknowledging the situation. Now that reprocessing is almost complete, schools have the official go-ahead to start sending aid offers.

Technical issues could have impacted the accuracy of some FAFSA results

In late March, the Department of Education said it was aware of tax data inconsistencies present on some Institutional Student Information Records (ISIRs), which could impact students’ aid eligibility. The department identified three issues affecting ISIRs:

  • Fields containing a mix of amended and original tax data.
  • Inaccuracies within the education tax credit data field.
  • Incorrect values in the education tax credit and income taxes paid fields in manually entered information, due to discrepancies in the instructions.

These, combined with a miscalculation in the Student Aid Index (SAI) formula, impacted about 30 percent of FAFSAs. As a result, many schools halted packaging and sending aid offers until the issue was resolved. This prompted the department to move quickly to reprocess the affected applications.

The Department of Education gives schools permission to send aid offers

On April 30 — a month after its initial statement — the Education Department announced that “nearly” all impacted applications had been reprocessed.

“After the progress we’ve made in recent weeks, we are now processing FAFSA forms quickly and accurately, and many schools are sending out financial aid offers,” James Kvaal, U.S. Under Secretary of Education, said in a statement.

“It’s time for schools to package and send aid offers, and for all new and returning students considering going to college this fall to come to and complete a Better FAFSA,” Kvaal added. “The Department’s top priority is to bring higher education more in reach for more students, and we know that the better FAFSA can help unlock those opportunities.”

Why reprocessing matters

The Free Application for Federal Student Aid or FAFSA is key for millions of college students to get access to federal grants, work-study programs and federal student loans.

The ISIR is the electronic document created by the department of Education. It contains a summary of the student’s FAFSA, as well as key results and the student’s SAI. The ISIR is sent to schools, so aid officials can determine the types of aid as well as the amounts students may be eligible for.

“Reprocessing these FAFSAs is important because financial aid administrators can’t provide students with accurate financial aid offers if the information their eligibility is based on is incorrect,” says Jill Desjean, senior policy analyst at the National Association of Student Financial Aid Administrators.

Inaccuracies within the ISIR could result in a bigger or smaller financial aid package than the student may be eligible for.

“Prompt reprocessing is crucial, too,” Desjean says. “This year’s financial aid cycle is already delayed by more than six months, giving schools very little time to make financial aid offers and giving students very little time to make one of the biggest decisions of their lives.”

Not being able to come up with a realistic budget could push students to take out private student loans, if aid falls short and time is of the essence. Unlike federal loans, these loans lack protections like income-driven repayment and forgiveness. 

Private student loans are also issued based on credit, so interest rates could be higher than those of federal loans. This is especially true for students who have thin credit and don’t have a co-signer with a strong credit profile.

What’s next?

Though the department expects “most, but not all” of the reprocessed forms to result in reduced aid for students, it is leaving it up to schools and states to decide whether to use the original ISIR if the reprocessed one results in less aid. For students experiencing issues with the FAFSA, they should contact the financial aid office of their school or call the Federal Student Aid Information Center (FSAIC) at 800-433-3243. Students can also get in touch with the FSAIC via live chat or email by visiting its website.