Government report blames Education Department for botched college aid revamp

Education Department officials launched a defective revision of the Free Application for Federal Student Aid last year despite signs it would cause widespread chaos, a government report says.

The Government Accountability Office published the findings Tuesday. They describe how Federal Student Aid officials knew by August 2022 that the rollout of the new FAFSA form for 2024-25 would need to be delayed past the usual October application start period, yet waited seven months to announce it publicly.

Citing the department’s internal data, the GAO blamed an ensuing three-month launch delay and technical glitches for 432,000 fewer students submitting a FAFSA for the 2024-25 term, a 3% decrease from the previous application cycle.

The report said a 9% drop in high school seniors and other first-time applicants led the way, with 325,000 fewer submitting applications for this fall. The largest decreases occurred among students from households with incomes between $30,000 and $48,000 a year.

“Declines in submissions were particularly pronounced among lower-income students and families,” Melissa Emrey-Arras, director of the GAO Education, Workforce and Income Security team, told a House higher education subcommittee hearing on the report.

As computer glitches blocked frantic high school seniors from applying for college aid, the GAO noted the Education Department received 5.4 million phone calls. The report found that 4 million of those calls, or about 3 in every 4, went unanswered.

Among the 1.4 million callers who got through, the Education Department instructed its call center workers to tell families to “try again later” without telling them when the problem would be resolved — a process the GAO noted sometimes took several months.

“We found that [the] Education [Department] did not consistently provide students with timely information or support,” Ms. Emrey-Arras said.

The GAO urged the department to contact students who did not submit a FAFSA last year about restarting the process.

Congress authorized the FAFSA revision in a bipartisan 2020 law aimed at abbreviating the online application and making it easier for families to calculate their federal aid eligibility. The legislation went into effect last year.

During Tuesday’s subcommittee hearing, Republicans and Democrats vented their frustrations on the Biden administration for slow-walking and botching the rollout.

“Regrettably, implementation of the law has been derailed by a series of mistakes made by the Department of Education, leading to delays and ongoing setbacks in the rollout of the new application,” said Rep. Frederica S. Wilson of Florida, the ranking Democrat on the subcommittee.

Rep. Burgess Owens, Utah Republican and subcommittee chairman, accused the Biden administration of prioritizing student loan forgiveness over the application revision.

“Since Day One, the Biden-Harris administration had time and resources to get this right, yet the Department of Education failed to deliver, and instead knowingly released a failed FAFSA ,” Mr. Owens said. “It reallocated valuable time and resources to push a radical political agenda, the unconstitutional student loan forgiveness scheme.”

The Education Department did not respond to an email seeking comment.

Over the past year, Education Secretary Miguel Cardona and other department officials repeatedly blamed some FAFSA problems on Congress refusing to increase funding.

The application fiasco prompted FSA Chief Operating Officer Richard Cordray to offer his resignation in April. He departed in July.

In a letter sent Monday to all college and university presidents, Mr. Cardona pledged that the revamped FAFSA will be ready in October for the 2025-26 application cycle.

“This update reflects this department’s unrelenting, laser focus at every step on making the FAFSA form work for more students and families – so they can access the life-changing potential of higher education,” Mr. Cardona wrote. “As we transform this process, we are leaving no stone unturned to learn lessons, fix problems, and improve processes – responding directly to the needs and concerns raised with the department by students, families, institutions, and partners.”

The GAO report did not criticize Congress. It flagged FSA officials for failing to vet the new application form, review its systems or fix nagging software glitches.

The report noted that 18 of 25 “key requirements” had not been met at the time of the form’s launch, including “the capability to determine final aid eligibility and distribute those results to schools.”

It further said the Education Department failed to inform an estimated 500,000 students that the online form miscalculated the amounts of aid they could receive, leaving students with “the inaccurate estimate” as a basis for their application decisions.

Peter Wood, president of the conservative National Association of Scholars, echoed concerns about the Biden administration redirecting Education Department resources away from these problems.

“During the Biden administration, Education Department priorities have involved many things other than accomplishing its primary tasks,” said Mr. Wood, a former associate provost at private Boston University. “This is chaos in action.”

Higher education insiders have linked the botched rollout to a surge in budget cuts, mergers and closures at struggling colleges over the summer.

For example, private Lindenwood University in Missouri eliminated 14 employees and several vacant positions in a 10% budget cut that administrators blamed on FAFSA delays driving down enrollment.

The Education Department’s National Center for Education Statistics reported last month that 99 colleges and universities eligible for federal financial aid shuttered during the 2023-24 academic year, shrinking the sector by 1.7% as closures accelerated from previous years.

Gary Stocker, who founded College Viability to evaluate campuses’ financial stability, said even a shortfall of 10-20 students who failed to complete a FAFSA last year is enough to “make or break” the finances of a struggling college.

“While hundreds of colleges are spinning their Fall 2024 enrollment number to look good, hundreds and hundreds more are silent,” said Mr. Stocker, a former chief of staff at private Westminster College in Missouri. “These silent colleges are the ones that will increasingly look at their financial health and realize they cannot continue.”