Fixed a FAFSA form error that would limit student financial aid

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The U.S. Department of Education plans to fix an error in how it calculates financial aid for students who will enter high school next year.

However, financial aid experts say implementing reform to the Free Application for Federal Student Aid (FAFSA) may now delay students getting financial aid offers.

The error included failing to adjust financial aid tables for inflation. Specifically, the tables show how much of a student’s family income must be “protected” to be considered available to pay for college expenses. Without adjusting for inflation, household purchasing power was considered higher than it actually was.

NPR was it First to report Tuesday The reform will now happen for new students in 2024-2025, but the exact timing is still uncertain. A Department of Education spokesperson declined to comment to NBC News.

It’s not entirely clear when Education Department officials first became aware of the problem, but it began receiving media attention late last year. The issue arose after a congressional mandate in 2020 to simplify the FAFSA form.

The department estimates that with the new reform, students will have access to an additional $1.8 billion in federal student aid.

But Justin Dreger, president of the National Association of Student Financial Aid Administrators, said in a statement that while making the adjustment was “the right thing to do,” he added that it “should have been done from the beginning.”

As a result, applicants’ data from the FAFSA will be retained longer before being delivered to schools, or incorrect applicant data will be provided to them before future reprocessing occurs, Nasfa said.

“Unfortunately, because the department is making these updates so late in the financial aid processing cycle, students will now pay the price in the form of additional delays in financial aid offers and compressed decision timelines,” Draeger said.

While many colleges and states use income adjustment tables to guide their financial aid offerings, they do not set aid amounts for students who automatically qualify for the maximum Pell Grant, according to the Department of Education.

More than 75% of Pell recipients receive the maximum grant, including the majority of low-income students, and these tables do not affect their Pell eligibility, the department said.

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