Nearly three-quarters (74 percent) of private nonprofit colleges said that the federal-aid crisis changed the composition of their incoming classes this fall, according to the results of a new survey released on Friday. Nearly half (49 percent) of respondents indicated that problems with the Free Application for Federal Student Aid, or FAFSA, made their freshman class “more difficult to fill.”
The findings come from the National Association of Independent Colleges and Universities (NAICU). Its survey, which includes responses from 251 institutions, or roughly 15 percent of the organization’s membership, provides a snapshot of how the FAFSA crisis affected enrollment and financial-aid outcomes following months of processing delays, technical glitches, faulty federal data, and coast-to-coast frustrations.
Forty-four percent of colleges that responded to the survey said that their incoming classes were smaller this fall compared with 2023. About a fifth (22 percent) said they enrolled fewer incoming students receiving financial aid. And 11 percent said their first-year class was less racially and ethnically diverse.
According to NAICU’s summary of open-ended survey responses, colleges reported fewer FAFSA filings among students and more delayed decisions, especially among first-generation students with great financial need. “Some institutions pointed out that private, nonprofit colleges emphasize net price early in admissions,” the summary says, “so less time and more pressure to make decisions — even when schools estimated aid packages — led to lower incoming enrollment.” Several colleges reported that some students skipped the fall semester due to FAFSA challenges.
More than half of institutions (58 percent) said that FAFSA challenges affected the amount of institutional aid that they distributed for the 2024-25 cycle. About a third (37 percent) reported an increase in the amount of institutional aid distributed, and 16 percent reported a decrease.
Among other findings:
- Most colleges (80 percent) said that recent changes to federal need-analysis formula affected aid eligibility among their students. Though the FAFSA still asks applicants to state the number of family members attending college, for instance, the answer is no longer used in calculating a student’s eligibility for federal aid. That change, cited by 67 percent of respondents, reduced the amount of need-based aid many families received.
- Most institutions (81 percent) reported a change in the percentage of incoming students receiving federal Pell Grants. About two-thirds (64 percent) saw an increase, with some reporting a rise of more than 50 percent; yet 14 percent saw a decrease. Many institutions attributed the shifts they saw to delays in FAFSA processing and the expansion of eligibility for Pell Grants (the U.S. Department of Education recently reported that as of late September, 7 percent more FAFSA filers were eligible for Pell Grants compared with the same time last year.
- Nearly half of all respondents (48 percent) reported an increase in their discount rate, while 20 percent reported a decrease. And nearly half of the colleges (45 percent) saw an increase in their net-tuition revenue, and 32 percent saw a drop. According to NAICU’s summary, uncertainty stemming from the FAFSA crisis prompted many colleges to to adjust their financial-aid strategies, and, in some cases, that meant providing more institutional aid up front.
“Some colleges noted changes in financial assessments created larger need gaps, which institutions addressed with grants from their own resources, resulting in higher discount rates,” NAICU’s summary says. “Others offered more aid to attract and retain students, but often overestimated their needs due to a lack of FAFSA data. Plus, some students who lost Pell Grant eligibility required additional institutional support.”
NAICU’s survey also reflected colleges’ frustrations with the Education Department. Nearly all respondents said that the department did not provide timely (90 percent) or clear (88 percent) information about the FAFSA crisis, hindering their ability to plan for the fall semester.
“It should come as no surprise that college and university leaders are disappointed with how the Department communicated throughout the rollout of the new FAFSA,” Barbara K. Mistick, NAICU’s president, said in a written statement. “While there have been improvements of late, a lingering distrust remains as we approach another deadline on December 1.”
The Education Department recently said that it remains on track to make the form available to all users by then. On November 1, the agency began its third phase of beta-testing meant to identify and resolve technical issues that might hinder large numbers of applicants down the line. According to an update posted on Thursday, the department has processed more than 10,000 FAFSAs submitted by students from a variety of backgrounds, including applicants experiencing homelessness, those with unmarried parents living together, and those with a family member lacking a Social Security number.
Weeks of beta-testing have enabled the department to detect and fix several minor technical issues. But so far, the agency reported this week, it has discovered “zero critical bugs.”
