The FAFSA form error that would have limited students’ financial aid is getting fixed

The U.S. Department of Education plans to fix an error in how financial aid will be calculated for students starting their post-secondary education next year.

However, financial aid experts say implementing the fix to the Free Application for Federal Student Aid (FAFSA) now could lead to delays in the students receiving financial aid offers.

The error involved a failure to adjust financial aid tables for inflation. Specifically, the tables show how much of a student’s family’s income should be ‘protected’ from being considered as available to pay for college expenses. Without the inflation adjustment, a family’s spending power would have been considered higher than it actually was.

NPR was the first to report Tuesday that the fix will now occur for incoming 2024-2025 students, but that the exact timing was still not certain. A Department of Education spokesperson declined to comment to NBC News.

It is not exactly clear when Education Department officials first became aware of the problem, but it began to receive media attention late last year. The problem emerged after a congressional mandate in 2020 to simplify the FAFSA form.

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

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

As a result, either FAFSA applicant data will be held even longer before being delivered to schools, or incorrect applicant data will be given to them before a reprocessing occurs in the future, NASFAA 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-making timelines,’ Draeger said.

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

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

CORRECTION (Jan. 24, 2024, 6:01 p.m. ET): A previous version of this article misstated to whom the financial aid is available. It is students starting their post-secondary education, not those entering secondary school.