How the Biden Administration Messed Up FAFSA

In late March, months into the Free Application for Federal Student Aid–rollout debacle that has thrown millions of students’ college plans into a state of flux, the Department of Education let universities know there was yet another issue. The data that the IRS automatically fed into the form were inconsistent. In some cases, those inconsistencies led to students being awarded more aid than they are eligible for—in other cases, less. The department had begun reprocessing the applications with missing data points that it believed would result in students receiving too little aid—but stopped short of redoing all of the inaccurate forms. Those students whom they expected would receive too much aid, well, they could keep the money.

“The department is essentially saying, Go ahead and award somebody financial aid based on information that is inaccurate. It just completely goes against every instinct that we have as financial-aid administrators,” Jill Desjean, a senior policy analyst at the nonprofit National Association of Student Financial Aid Administrators, told me. “We’re worried about risks. We’re worried about program integrity, we’re worried about taxpayer dollars and being stewards of those funds.” A week later, after fielding the complaints from administrators, the Department of Education said it would reprocess all of the incorrect applications; but if institutions did not want to wait, they could make students aid offers based on the old forms.

Normally, the FAFSA is available at the beginning of October. Students fill it out and send it to Federal Student Aid, an office within the Department of Education. Then, FSA calculates how much federal aid a student can receive (through loans, grants, and work-study programs) and transmits those data to colleges, which then create a student’s financial-aid award letter, which explains to admitted students how much money—federal and from the school itself—they’ll receive to attend that college.

[Read: The confusing information colleges provide students about financial aid]

But for the 2024–25 academic year, the Department of Education introduced a new FAFSA. It has fewer questions and is designed to allow 1.5 million more students access to the maximum Pell Grant a year. Updating the FAFSA took longer than expected, and the form didn’t go online until the end of December. The formula for how much aid students should get was wrong—leading to a nearly $2 billion undercalculation in total. Meanwhile, the department has blown past self-imposed deadlines to fix other issues as they have arisen. This fiasco has left students unsure if they’ll have the money to pay for college, necessitated that institutions change long-set deadlines, and, to some extent, justified Republican lawmakers’ charges of government ineptitude in an election year when Democrats can least afford it.

The new FAFSA rollout did not have to be this way. The Biden administration could have focused on making sure that FAFSA worked, though it would likely have had to punt on other priorities, such as student-debt relief. And that may have made a good deal of sense: After all, changing higher-education regulations and canceling debt won’t help students if they can’t figure out a way to pay for school in the first place. Interviews with several current and former Department of Education officials, who spoke on the condition of anonymity to discuss sensitive information, as well as a review of public records reveal how the FAFSA-overhaul process was flawed from the beginning, and the ways that the administration’s ambitious agenda, plus a trail of missed deadlines, communication breakdowns, and inadequate funding, have led to a massive disruption in higher education. All of this could have been avoided, but now it must simply be managed.

Ask 100 people, and you will get 100 different explanations for how and why things went wrong with this year’s FAFSA, but they all have a starting point in common.

On December 27, 2020, then-President Donald Trump signed the Coronavirus Response and Relief Supplemental Appropriations Act into law. The omnibus package included the biggest legislative tweak to federal financial-aid policy in years. That update was the FAFSA Simplification Act, which would reduce the number of questions on the form from 108 to a maximum of 36. It threw out questions about Selective Service and drug convictions. But the changes were not only about process: The act also expanded the amount of federal aid that hundreds of thousands of students would be eligible to receive.

Career government officials routinely quip that it’s harder to work for Democrats than Republicans because Democrats want to expand the government’s reach and Republicans want to limit it. Staffers I spoke with at Federal Student Aid said the past four years have been proof of the concept. When the Biden administration assumed office, they inherited a healthy workload: overhauling loan servicing, FAFSA simplification, and the return to loan repayment after the pandemic pause. But they also added to those tasks with their own ambitious agenda for the Department of Education generally and the Federal Student Aid office specifically, including student-debt cancellation (a campaign promise) and undoing several Trump-era regulations, such as the borrower-defense-to-repayment and gainful-employment rules.

Yet their plans quickly confronted reality. The Department of Education’s workforce was severely depleted. In the first two years of the Trump administration alone, the department had the highest turnover—13 percent—of any federal agency, according to a Government Executive review. Now that culled workforce was trying to help colleges and students navigate the pandemic. Two sources told me that career staff warned Biden transition officials that they would be walking into a department full of dedicated workers who were, plainly, burned out.

In the early days of the Biden administration, however, there wasn’t much that staff at the department, regardless of seniority, could do to slow the agenda down. Many of the directives about what to pursue—and when—came directly from the White House and the Domestic Policy office. “There are people who’ve been at FSA for nearly 30 years, and they’re like, ‘The amount of White House involvement is totally insane,’” one staffer at the organization told me.

When Education Secretary Miguel Cardona was confirmed in March 2021, it was already clear that the timeline set out to revamp the FAFSA was too optimistic. Accordingly, department officials asked for additional time to complete the task. In June, Congress granted an additional year extension. But staff members at FSA had argued since early February of that year, in the weeks after the inauguration, that even that would not be enough time. Between the lack of manpower and the complexity of the rebuild, they would need at least two years to update the database, change aid formulas and tweak questions, get public comment, and test their systems to ensure everything was in order before the rollout.

The architects of the FAFSA Simplification Act on Capitol Hill did not expect that the department would overhaul its back-end systems to comply with the law—and several lawmakers have argued that perhaps they didn’t have to, but once the process of rebuilding the system from the ground up began, it was difficult to stop.

“The new FAFSA is, of course, more than a new form,” a senior department official told me. “But it was a complex undertaking on our side that required replacement of more than a dozen computer systems, including some that are older than the parents filling out the form now.” The system’s update was necessary, the official said, to meet the security standards around handling tax data.

Lawmakers were eager to get the new FAFSA online, though, which made securing more time politically difficult. “The FAFSA simplification is two bipartisan pieces of legislation that are important accomplishments that members of Congress were rightly very proud of, and they were eager to see the benefits of FAFSA simplification reach students,” the senior department official told me.

Somewhat predictably, the project encountered routine hiccups: Contractors offered deadlines that they failed to meet; staff was delayed in revamping systems written in COBOL, an archaic programming language; and important details were not fully comprehended as political staff—more skilled in policy than implementation—did not understand the severity of the issues. One former political appointee at the department told me that Biden officials stumbled because they were too confident about their ability to solve problems as they arose. “There was this perception that even though we're finding problem after problem after problem, it’s okay because we’re already solving for them in real time,” the appointee said. “They believed they didn’t have to worry about it and they could just keep focusing on other things that were more interesting, because FAFSA simplification was inherited anyway. It created a lack of urgency until it was too late.”

Staffers at FSA agree. “I’ve experienced this where they would be pissed if you don’t offer a solution,” one staffer told me. “So we’d say, ‘Here are a few options to choose from, and most of these options aren’t great, because we’re out of outlets when you don’t have money and you don’t have enough staff.’” But the fact that the options weren’t great, they argued, was lost in translation.

The administration went to Congress, several times over, for additional money for Federal Student Aid. They requested that lawmakers increase the organization’s budget by a third in their 2023 ask, and an additional $620 million in the 2024 budget proposal to ease the return to repayment and update FAFSA. But in each year, the organization was flat-funded. Republicans viewed additional funding as a nonstarter. “This is not a funding issue. This is a management one,” Virginia Foxx, the chair of the House Education and Workforce Committee, wrote in a letter to the editor of The New York Times. And Democrats, although generally inclined to help the administration’s Education Department, were unwilling to allocate the additional funding to FSA at the expense of other budget priorities, particularly because some of the more progressive members would like to move the country away from the current system of the government financing sky-high tuition—a system in which FSA plays a major part.

Meanwhile, the Biden administration’s other priorities, such as the push for debt cancellation (which was later blocked at the Supreme Court and which the administration has subsequently initiated through other programs, such as the expansion of eligibility for Public Service Loan Forgiveness), required immense resources and attention. The totality of these efforts amounted to a lot for the already overworked FSA staff.

If at one point the FASFA overhaul was neither a money nor a management issue, it is now both, and students will continue to suffer for it.

Last Wednesday, lawmakers vented their frustrations about the process as they held dueling congressional meetings—one with Education Secretary Cardona, another featuring a panel of financial-aid experts. During a hearing about the Biden administration’s budget, Republicans criticized the administration’s focus on other priorities. “The American people want to see you focused on getting students into the classroom, not repaying loans for people who have already been there,” Representative Julia Letlow of Louisiana told Cardona.

Cardona tried to repel those criticisms. “I don’t want you to think they’re not doing FAFSA because they’re working on something else,” he told the panel. “FAFSA has been a priority since day one when we got into these positions, and it will continue to be a priority until we deliver for those students.”

FSA staff members agree that this was not an issue of moving people onto the wrong projects. But they remain upset that the FAFSA problems did not receive the attention they should have. “We have been saying for the last three years that we can’t get all this stuff done, this is too much, the servicers can’t do all of this … and now that the FAFSA is falling apart, there is a little bit more like, ‘Oh shit, maybe FSA wasn’t lying,’” a frustrated staffer told me. Meanwhile, political officials continue to set ambitious deadlines—ones that staffers who are working around the clock are already unsure they’ll be able to meet.

Had this year’s FAFSA rollout gone according to plan, millions of students would already have their aid packages; some students would have already committed to attending college, secure that they could afford it.

By now, the department would have turned its attention to next year. Staffers would already be figuring out how they could make the process smoother. They’d be revising questions, updating the form, and submitting it for public comment. But as they continue to try to amend the form and address the errors for this year, they have put themselves behind the curve.

The best hope is that the FAFSA rollout turns out to be a lot like healthcare.gov: a disaster by any measure at first, but one that eventually did improve an old, broken system. By then, though, some students will have decided against college, some institutions will have struggled with enrollment dips, and faith in government will have taken another hit.