In a recent announcement, the Department of Education revealed that it has discovered an error made by a vendor that has affected several hundred thousand financial aid forms. This miscalculation could potentially lead to further delays in the dispersal of students' aid awards, thereby causing setbacks in their decisions on which college to attend next year. Financial aid experts have expressed concerns about the added complications this error brings to the already problematic FAFSA (Free Application for Federal Student Aid) process this year.

Usually, colleges send out financial aid award letters to students in March and request a decision by May 1 regarding their enrollment for the following fall semester. However, due to ongoing issues with the FAFSA, many colleges have already delayed this timeline. The newly discovered problem will likely exacerbate the delays experienced by students, according to Justin Draeger, CEO of the National Association of Student Financial Aid Administrators.

The impact of this vendor's error is significant, as it affects the Institutional Student Information Records (ISIRs) sent from the government to colleges. The error specifically affects ISIRs sent before March 21 but has been resolved for information sent after that date, as confirmed by the Department of Education. Fortunately, the majority of the 1.5 million ISIRs delivered to colleges so far remain unaffected. In order to mitigate the issue, the Department of Education has provided workaround instructions for colleges to process the impacted ISIRs, allowing them to generate tentative aid packages for students.

This error was brought to light when the Department of Education began sending a large volume of ISIRs to colleges earlier in March. It is primarily impacting dependent students who have personal assets to report on their FAFSA forms. The department assures that they will continue to deliver ISIRs to schools over the coming days, as they work through the 6 million FAFSA submissions received thus far.

The FAFSA process this year has faced numerous challenges. Late last year, the Department of Education introduced significant changes to the FAFSA form. However, the release of the updated version was marred by availability issues, with the form only being accessible sporadically, for short periods of time during the first two days. It wasn't until January 8 that the form became available 24/7, but the delay had already impacted the application process.

Furthermore, in January, the Department of Education made adjustments to the financial aid calculation to align it with the latest inflation data. While this made an additional $1.8 billion in financial aid available to students, it also contributed to the slowdown in FAFSA processing. Consequently, the department decided to postpone sending ISIRs to colleges until the first half of March, which coincides with the time when schools typically aim to send out financial aid award letters.

Moreover, students and families have encountered glitches with the new form. Initially, parents without Social Security numbers faced difficulties starting or contributing to their child's FAFSA form, despite being allowed to create an account and access the form. These issues have prompted criticism from lawmakers on both sides of the aisle, and the Government Accountability Office has launched an investigation into the implementation of the new form.

Despite the challenges, the Department of Education remains committed to improving the FAFSA process. The new version of the form aims to simplify the application by reducing the number of questions from 108 to as few as 18. Some information is now directly sourced from tax returns, alleviating the need for filers to search for old tax records.

The Department of Education estimates that the new FAFSA version will qualify an additional 610,000 students for a Pell grant, a federal aid program that supports students from low-income families. Additionally, around 1.5 million more students will be eligible for the maximum Pell grant amount, which for the 2024-25 school year is valued at $7,395.

As the Department of Education continues to address these challenges and work through the FAFSA submissions, students and families are advised to stay updated and follow any instructions provided by their respective colleges.