WSJ: A Financial-Aid Form Is Upending College Decisions

Students and families will have to complete the already stressful process of choosing what college to attend under tighter deadlines and greater uncertainty than ever this year.

The source of this heightened anxiety is a change by the Education Department intended to speed up and simplify how families qualify for financial aid. Delays rolling out the revamped Free Application for Federal Student Aid, or Fafsa, meant the aid applications, which normally begin in October, couldn’t open until late December. Then technical glitches during the soft launch of the online form further exasperated families and schools.

In the past, colleges would receive data from the Fafsa days after the application is filed. Information from the new form won’t be available to colleges until late January at the earliest, leaving many financial-aid offices unable to assist families until then. Despite the bumpy start, the department said that it has received more than one million applications since Dec. 30, and that the form is now fully up and running.

Students who applied to college early and have already been accepted by the school of their choice are facing a time crunch: They might not get their full financial-aid packages until March or later, which is after some colleges’ early-decision deadlines. Early-decision applicants are generally committed to attend if they are accepted, though can back out if the family can’t afford to pay. Early-action applicants, like regular-decision applicants, often have until May to make a decision.

“This is the time of year where campuses are usually sending out our preliminary aid offers in order to recruit students to our campus,” said Brad Barnett, financial-aid director at James Madison University in Harrisonburg, Va.

Monique Cespedes spent New Year’s Eve trying to access the new Fafsa form but didn’t have much luck. Her 17-year-old daughter, Vanessa, has already received acceptance letters to four colleges, a mix of public and private schools. 

The tuition for her daughter’s schools range from $28,000 to $50,000 a year. But they can’t choose a college until they complete the Fafsa and receive a full financial-aid package, said Cespedes, who lives in North Carolina. Her family can’t afford to pay any more than $5,000 a year toward tuition.

“We were hoping to have a decision by now,” she said. “It’s just really putting a burden on decision-making.”

Cespedes, like most early-action applicants, doesn’t have to commit to one school and can wait until May 1 to make a final decision. The delay has still added other costs and headaches. Some colleges require nonrefundable deposits before this year’s financial-aid packages will be available. And at some schools, those who commit sooner get better housing options and other perks.

“I just can’t put $300 deposits down at three different schools just waiting on this Fafsa form,” Cespedes said. “It’s frustrating.”

How colleges are responding to delays

Some of the colleges that use Fafsa information to grant institutional aid are either creating their own financial-aid applications or extending the deadline for students to accept an offer. Lewis & Clark College, a private institution in Oregon, extended its early-decision deadline, typically in January, to Feb. 15 to accommodate students waiting for their financial-aid results.

“We understand how much the Fafsa timing means to students and families, and as a matter of equity, we always want to keep their needs front of mind,” said Eric Staab, vice president for admissions and financial aid at Lewis & Clark.

Parents often rush to fill out the Fafsa as soon as possible, believing it improves the chance of receiving more aid. Federal grants don’t work on a first-come basis, but some colleges do have priority deadlines that can mean more opportunities for aid. 

Schools with binding early-decision applications, mainly private colleges, often use an alternative financial-aid form, the CSS Profile, that can give students a rough idea of how their federal aid award might look, said Shannon Vasconcelos, senior director of college finance for Bright Horizons College Coach.  

The new way aid is being calculated, designed to make more students eligible for federal Pell grants, has parents of high-school seniors and current college students unsure what to expect to pay out of pocket. Some families, including those with more than one child attending college, could receive less aid under the new formula.

College counselors say it is unclear what to tell students and families grappling with whether or not to commit to a college before knowing what their full financial-aid package will be.

“I’m in counselor groups on Facebook where counselors are saying, ‘What do I tell the kids?’” said Allison Tate, director of college counseling at Lake Mary Preparatory School, a private school in Lake Mary, Fla.