The financial-aid process isn’t supposed to be a choose-your-own-adventure story, but the federal government’s latest decision essentially guarantees that, this year, it will be.
The U.S. Department of Education on Thursday announced that, in response to feedback from colleges, it would reprocess all federal-aid forms containing recently reported tax discrepancies. The decision reversed the agency’s announcement on Monday that it would reprocess and resend only those forms with errors that, if left uncorrected, would deprive applicants of federal aid they’re eligible for.
But one part of the department’s latest announcement troubled some financial-aid officers. Colleges, the department said, “can choose” which record to use — the original, with the incorrect data, or the corrected, reprocessed one — when creating financial-aid offers. “We encourage schools that choose to move forward with the original,” the department said, “to start packaging aid offers as quickly as possible.”
The announcement points to the tension between two competing concerns for colleges: getting offers out the door as soon as they can — and ensuring the accuracy and fairness of the financial-aid process. By telling institutions that they’re free to base their offers on forms that include inaccurate data, the government is giving colleges the green light to move forward with aid packaging. But it’s also giving financial-aid officers permission to do something that goes against their nature.
“It’s reactionary,” Nick Prewett, executive director of financial aid and scholarship services at Stony Brook University, in New York, said of Thursday’s announcement. “Everybody in the financial-aid community wants to make sure we have the good data, because we’re ultimately responsible for the aid we give out. That the department is going to reprocess everything is exactly what we wanted. But they added this little caveat that, if you want to use bad information you already have, go ahead and do it, because it’s important to get offers in the hands of students. That’s like one step forward, two steps back. Now we’re confused again.”
The troubled rollout of the new Free Application for Federal Student Aid, or FAFSA, has sapped the patience of just about everyone with a stake in the financial-aid process. After months of delays in sending processed federal-aid forms — known as Institutional Student Information Records, or ISIRs — to colleges, the department finally started sending them in mid-March. But as ISIRs have been rolling in, several problems with FAFSA data have emerged.
In late March, the department announced that a technical problem had caused inaccurate estimates of aid eligibility for about 200,000 dependent students who had reported assets on their FAFSA. Then, as The Chronicle first reported last week, the department announced that it was investigating reports of another set of problems that financial-aid officers had detected. On Monday, the department said that a review it conducted with the Internal Revenue Service revealed that about 20 percent of 6.6 million federal-aid forms processed so far this year included inconsistent tax information. And that meant that hundreds of thousands of FAFSAs had inaccurate calculations of the Student Aid Index, or SAI, a number used to determine how much federal aid an applicant should get.
The department said earlier this week that about 5 percent of all submitted FAFSAs had artificially high SAIs — and that it would reprocess those in the first half of April.
As for the rest of the FAFSAs with errors, the department said initially that “where adjustments would result in less aid to students, we will not reprocess unless asked to do so by schools.” So, it would be up to colleges, the department said, “to decide, on a case-by-case basis,” what to do with ISIRs containing inconsistent data that, if reprocessed, would likely increase an applicant’s SAI and thus reduce their aid eligibility.
That would put financial-aid officers in a difficult position, Emmanual Guillory, senior director of government relations at the American Council on Education, said on Wednesday. “You don’t tell a professional who has been trained to dot all of their I’s and cross all of their T’s that they can use incorrect data to allow students to get more aid,” he said. “That goes against everything that they’ve ever been taught. They have to make sure, for accountability reasons, that they’re using accurate information when processing ISIRs, and it’s very concerning that the department is basically saying, in the spirit of trying to process these ISIRs as fast as possible, let’s budge on accuracy.”
Making sure we are informing current and prospective students of the correct information — that is what we’re supposed to do.
Guillory conceded that, like colleges everywhere, the Education Department is in a tough spot. “They’re all trying to figure out how to make this work best for students,” he said. “But we don’t know how this is going to impact colleges’ future ability to participate in Title IV funding, or how this goes against what colleges agreed to in their program participation agreements, or what this looks like, when they’re audited.”
And Guillory anticipated another concern. “Making sure we are informing current and prospective students of the correct information — that is what we’re supposed to do,” he said. “But if that results in them potentially getting less aid, then all of a sudden, we’re the bad guys for doing it.”
The department confirmed in its announcement on Thursday that, despite its plan to reprocess all FAFSAs affected by “previously identified issues,” institutions will maintain “the ability to use their judgment to rely on the original ISIR sent — not the reprocessed record — if the original ISIR results in greater financial-aid eligibility for students.”
Guillory, who on Thursday praised the department’s decision to reprocess all affected FAFSAs, called that sentence “problematic.” At the same time, he said, it would likely reassure colleges that the government will not penalize them for basing aid offers on the ISIRs they have in hand.
But several financial-aid officers said on Thursday that they would like to see formal assurances from the department that their institutions will be held harmless if they use the original ISIRs that contained inconsistencies. Some said they were concerned about the “bait-and-switch” scenario that Karen McCarthy, vice president of public policy and federal relations at the National Association of Student Financial Aid Administrators, described in an interview with The Chronicle earlier this week: “Depending on how big the discrepancy is, if a college doesn’t make an adjustment, and the student gets more aid this year based on this incorrect information, what happens next year when they come back and say, ‘Now I’m not eligible for the same aid, but nothing has changed’?”
Many financial-aid officers feel frustrated by continuing delays and technical issues, not to mention the government’s responses to recent problems with the FAFSA.
Jayne Schreck, associate vice president for student financial planning at Monmouth College, in Illinois, said she was frustrated when the department initially said it would not reprocess all the problematic FAFSAs and instead provide colleges with two massive lists of applicants who were affected by the known errors, and of those who were not. “It was not responsible reprocessing,” she wrote in an email on Thursday. “It was irresponsibly dumping the problem in the laps of financial-aid offices and IT offices on campuses everywhere to find a solution or work-around.”
Schreck suspects that many colleges, especially those with small staffs, will wait for the reprocessed FAFSAs before sending aid offers. But she also knows that families are desperate to receive information about costs and aid.
So, Monmouth decided to create aid packages using existing ISIRs and the current SAIs. The college has advised families that their offer is based on the most current information it has received from the government. She anticipates that roughly 15 percent of applicants might end up having a corrected FAFSA, with a revised SAI. “If they fall into that 15 percent,” she said, “then we will notify them of that fact as soon as possible and update their financial-aid offer accordingly.”
Meanwhile, many financial-aid officials are trying to make sense of the data they’ve received from the government. It’s one thing to count the number of ISIRs received, and another to determine how many of those ISIRs are “actionable” right now.
Right now, the rules are getting bent, if not broken.
Prewett, at Stony Brook, shared some of his institution’s ISIR data with The Chronicle. It reveals just how much is still up in the air.
As of April 1, Stonybrook had loaded 30,597 processed FAFSAs that it matched with current and prospective students in its information system. Of those forms, 6,133 had been rejected, which means that those applicants must make corrections to their FAFSA; until they do so, the university can’t send them a financial-aid offer. (Applicants still can’t make corrections, but the department has said they will be able to do so in the first half of April.)
That leaves Stony Brook with 24,464 viable ISIRs. Estimating that 20 percent of those were affected by the tax-information problems — based on the department’s figures — drops the total down to 19,571 files. Prewett said he and his colleagues have detected another 5,500 applicants that will need to have their assets recalculated. They also identified other issues that affect 517 other students.
So that means that just 13,554 — or 44.3 percent — of the 30,597 FAFSAs are ready to roll at the moment.
Prewett cautions that those numbers aren’t exact — and that they probably include some double counting. “Some of those 5,500 with an asset issue may also have an IRS issue too,” he said. “So the 44.3 percent is probably on the low end, but it’s still a good grasp. We’re saying somewhere between 40 and 50 percent of our students are probably OK.”
“Probably” isn’t a comfortable word within the financial-aid profession. “Financial-aid officers tend to be pretty black or white,” Prewett said. “Tell us to do X, we review the information, we make sure it’s right, and here’s the output. My job depends on me being compliant with the federal rules. And right now, the rules are getting bent, if not broken.”
Prewett’s concerns go beyond compliance. He said he’s worried about the ethical implications of what will shake out this spring when some colleges are sending out aid offers based on reprocessed FAFSAs and others aren’t. Some applicants might get more aid than they should, and others might get less, depending on whether a college chooses to, as the department said, “rely on the original ISIR sent.”
“You could have a student who gets a different Pell Grant amount at two different institutions, which is something that hasn’t happened in the past,” he said. “If one who applied early, before the errors were corrected, gets processed differently than one who applies later, that’s not equity. The question here is, how are we going to treat everyone equally?”
Bryce McKibben, senior director of policy and advocacy at the Hope Center at Temple University, sees the question from a different perspective. The former senior policy advisor for U.S. Senator Patty Murray, a Democrat from Washington, advocates on behalf of students with many needs that can hinder them from succeeding in college.
“I totally understand why financial aid offices are overwhelmed by these constant and maddening changes,” McKibben said in an email. “But I also know most students are struggling, too, and they need every penny they can get. I don’t see why a college would voluntarily choose to reduce student aid now when they don’t have to because some students might expect the same aid in the future. Many won’t notice and just need the money. Pell Grants still won’t cover their full college costs and families are really struggling.”
