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Education Dept. delays simplification of the FAFSA

Richard Cordray, chief of the Education Department's office of Federal Student Aid, said the unit will phase in changes to the federal financial aid application, which will delay the completion of work by a year. (John Minchillo/AP)

The Education Department is delaying changes to the federal financial aid application meant to streamline the process, disappointing advocates who worry about the pandemic’s continued effect on students from lower-income households.

On Friday, the department said it will need another year to implement provisions to streamline the Free Application for Federal Student Aid, known as FAFSA, that Congress included in the $1.4 trillion spending package in December.

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“We’re already hard at work modernizing the FAFSA system. But we’re taking care to ensure you can apply for and receive federal student aid at any point," Richard Cordray, head of the Education Department’s Federal Student Aid office, wrote in a blog post Friday. "That’s why we’re breaking up this extensive work into bite-sized pieces.”

House and Senate leaders agreed to reduce the number of questions on the aid application from 108 to 36 and limit requirements for students experiencing homelessness and those formerly in foster care to receive financial assistance. They decided to shield more of the money that working students earn from the formula used to determine aid.

The spending bill also ensures that more families with substantial financial need receive more aid.

Those changes will enable an additional 1.7 million students to qualify for the maximum award each year and make an additional 555,000 newly eligible, according to lawmakers.

But it will take a while longer to get there.

Work was supposed to wrap up in time for the 2023-2024 application cycle, but will now be completed by 2024-2025. The department is moving toward a phased implementation of the changes. It said some overhauls will arrive earlier than scheduled, including the removal of selective service and drug conviction requirements for federal aid eligibility.

Still, student advocates expressed concerns about the new approach as the financial turmoil brought on by the pandemic continues to push higher education further out of reach for vulnerable students.

According to the National Student Clearinghouse Research Center, more than 600,000 fewer students enrolled at colleges and universities this spring compared with the same time last year. The year-over-year drop is the largest in a decade, and the greatest declines are occurring at community colleges that enroll large shares of students from lower-income families.

“The urgency for students to access need-based aid has only grown since the passage of this legislation,” said Kim Cook, executive director of the National College Attainment Network’s (NCAN). "We appreciate that these sweeping changes require attention to detail and upgraded systems to improve, not complicate, the process for students.”

Higher-education experts were skeptical about the department meeting the deadlines set forth by Congress, in part, because of the antiquated system underpinning the financial aid form. Cordray made note of the need to update the technology in his post Friday.

“Believe it or not, the current system is 45 years old, and though we have made it work all these years, it’s just too limited to support these new changes,” he said.

Democratic and Republican congressional aides say lawmakers are working on a bipartisan plan that will give the federal student aid office the flexibility to effectively implement the changes.