Colleges Are Facing an Enrollment Nightmare

For years, Senator Lamar Alexander was known for theatrically unfurling a paper document so long that he could hold it above his head and still see it drag along the chamber floor. It was the Free Application for Federal Student Aid, or FAFSA, a form that every college student and their family must complete to be eligible for federal grants and student loans. Detractors argued that its length (more than 100 questions) and complexity (experts joked that you needed a Ph.D. to complete it) deterred students from getting aid and attending college. In December 2020, on the eve of Alexander’s retirement, Congress finally passed legislation to simplify the form, with implementation ultimately scheduled for the high-school class of 2024. It was a rare win for bipartisan, commonsense governance: less paperwork, more kids going to college.

That was the idea, anyway. In practice, seemingly every phase of the implementation has gone wrong; an ostensible process of simplification has made enrolling in college much harder. And while the government scrambles to fix the problems it created, time is running out for an entire nation’s worth of high-school seniors. The effect on college attendance threatens to be even worse than the coronavirus pandemic was.

The trouble began last fall. First, the Department of Education announced that the FAFSA, which usually launches October 1, wouldn’t be online until December. It went live on December 30, just days before the deadline set by Congress—then went dark less than an hour later. By the second week of January, the FAFSA was up around the clock, but that didn’t mean the problems were over. Students and parents reported being randomly locked out of the form. Because of some mysterious technical glitch, many students born in the year 2000 couldn’t submit it. And students whose parents don’t have a Social Security number couldn’t fill out the form. The department reported “extraordinary wait times” as its helpline was clogged with calls.

On January 30, the day before the department was set to transmit the completed forms to colleges, it announced that the forms actually wouldn’t go out until mid-March. It used the time to change its aid formulas to account for inflation (its failure to do so had left some $2 billion in awards on the table). “We always knew it was going to be rocky, because the changes were so big and significant,” Amy Laitinen, the director for higher education at the think tank New America, told me. “But I don’t think anybody could have imagined how rocky. I don’t even know if rocky is the right word at this point.” Other experts suggested alternatives: “nightmare,” “unprecedented,” and “a mess all around.”

Now most students can at least fill out the application, but the overall situation remains disastrous. The department has processed more than 4 million forms, but 2 million remain in bureaucratic purgatory. And although colleges have at last begun receiving the information that allows them to calculate student-aid awards, issues keep cropping up. Many schools are reporting dramatically higher error rates than usual in submitted FAFSAs, and the Department of Education says that students won’t be able to fix their forms until early April. Last week, the department announced that its processing system had incorrectly calculated aid for about 200,000 applicants. Each mix-up delays when students find out how much aid they’ll get—which, for many applicants, determines where they will enroll or whether they can afford to go to college at all. Many colleges require that students enroll by May 1, potentially giving applicants just weeks or even days to decide where to attend.

[Jeffrey Selingo: The college-admissions process is completely broken]

Even more worrying are the students who might not enroll anywhere. According to Bill DeBaun, the senior director of data and strategic initiatives at the National College Attainment Network, 31 percent fewer high-school seniors have submitted the FAFSA compared with this time last year—a potentially missing cohort of 600,000 students. That’s a larger decline than occurred in any year during the pandemic, and it’s disproportionately clustered among schools with high shares of low-income students, the exact people who are least likely to go to college without financial aid. Another 2 million adults, mostly current college and graduate students, have yet to apply for the upcoming academic year. “Every time you establish any kind of a barrier to college access, it leads to a permanent drop-off in the number of applications,” Mark Kantrowitz, a financial-aid expert, told me. With declining enrollment, small colleges with high rates of low-income or minority students could fall into financial peril, Fitch Ratings warned earlier this month.

“We’re absolutely going to see a decline in students going to college,” Laitinen said. “The question is how catastrophic it will be.”

Depending on whom you ask, the FAFSA rollout is a story either of insufficient investment in the public sector or of government overreach and incompetence. Both accounts could have some truth to them. “Everyone blames everyone else,” W. Kent Barnds, vice president of admissions and financial aid at Augustana College, told me. “But I think the reality is that nobody made this huge, generational change a priority.”

Congress passed the law in the waning days of Donald Trump’s term, but implementation mostly fell to the incoming Biden administration. The job proved formidable. “The scope of the changes are massive,” Catherine Brown, the head of policy and advocacy at the National College Attainment Network, told me. “They changed everything from the process to the form itself to the formula for determining federal student aid, and they changed it all at once.” Making things harder still, the FAFSA overhaul was just one of many major challenges facing the Department of Education, which was also charged with distributing COVID-relief funds, carrying out Joe Biden’s student-loan-forgiveness plan, updating its loan-servicing system, tightening regulations around career-training programs, and resuming student-loan payments after the pandemic pause. These tasks were mainly the responsibility of the office of Federal Student Aid, a small group of employees nestled within the broader department. Preston Cooper, a senior fellow at the Foundation for Research on Equal Opportunity, told me that the Department of Education would have had enough time to complete the congressionally mandated FAFSA simplification if only the Biden administration hadn’t loaded it with so many other priorities.

Others blame Congress, which kept the department’s budget stagnant even as it assigned it more work to do. During the 2023 budget process, Congress appeared ready to give the department more money. But the effort became snarled in the politics of student-loan forgiveness. Republicans reportedly offered funding to hire new staff, but demanded that the money not be used for student-debt cancellation. Democrats rejected the deal. Nick Hillman, an education-policy professor at the University of Wisconsin at Madison, said that the “hollowing out” of the department forced it to rely on third-party contractors to complete its technical fixes. (The online infrastructure was written in COBOL, a computer language invented during the Eisenhower administration.) But the companies missed deadlines and had bugs in their code.

[David Deming: The worst way to do college admissions]

By March 2023, it became clear that the FAFSA rollout would not go as planned. Department staff indicated that the form wouldn’t open until December. “At that point, I think it was full-on panic in higher education,” Robert Kelchen, an education-policy professor at the University of Tennessee at Knoxville, told me. Since then, the Government Accountability Office has, at Congress’s request, begun investigating the errors. Precisely what went wrong and why is still up for debate.

For now, the Education Department is focused on containing the damage. Employees are working 12-hour shifts, and spare manpower is being shunted toward FAFSA processing. The department announced in February that it would send employees to help colleges process students’ financial records. And earlier this week, it urged states to delay their priority-aid deadlines, and to keep a cash reserve for additional students who complete the FAFSA. More than 100 schools have already pushed back their enrollment deadlines.

Yet even if schools change their deadlines and the department gets through its FAFSA backlog, that still leaves 2.6 million fewer students who have submitted applications compared with this time last year. Education experts are skeptical that all or even most of them will fill out the FAFSA in time to start college this fall, although technically there’s still time. The biggest worry is the 600,000 high-school seniors who have never applied for aid before. Kevin Carey, Laitinen’s colleague at New America, points out that most young people aren’t on a fixed path to college. They’re weighing whether to go to school or take a job. “If you don’t even know what the cost is in your cost-benefit analysis, you just go with the benefit” of getting a job, Carey told me.

In the long run, nearly everyone seems to believe that the new FAFSA will be better. Low-income students will ultimately get more aid, and more students will be eligible for grants. The experts I spoke with said it might even be worth the cascade of delays and errors. But we just might sacrifice the class of 2028 to get there.