Congress tasked the incoming Biden administration with carrying out one of the most consequential updates to the federal financial aid system.
The project was ambitious. The budget was lean. But delivering the new Free Application for Federal Student Aid — a simpler, shorter version of the decades-old form — could have been a major win for the administration. Instead, it has been a major headache.
The financial aid form debuted in December 2023, more than a year later than promised. It contains technical errors that make it impossible for some families to complete the application. Submissions are piling up at the Education Department, where officials are behind in processing applications, preventing colleges from issuing financial aid awards. A federal watchdog has launched two investigations and lawmakers are furious.
Congressional Republicans accuse the Biden administration of being so preoccupied with canceling student loans that it bungled the implementation of the new FAFSA, a key step for students to gain access to grants, scholarships and loans. The administration, meanwhile, blames lawmakers for setting unrealistic deadlines and denying requests for more resources. Higher education experts say that both arguments are valid and that there is enough blame to go around.
“Both administrations, Congress and the contractors all played a role in the mess,” said Bryce McKibben, who helped write the FAFSA Simplification Act in 2020 while working for Sen. Patty Murray (D-Wash.). “We drafted a transformative yet imperfect law but should have given it more time and funding to be implemented.”
Across two administrations
Although the Biden administration did the heavy lifting on the new FAFSA, the project started taking shape during the Trump era.
Streamlining the FAFSA was a top priority for Sen. Lamar Alexander (R-Tenn.). The now-retired politician introduced legislation in 2018 to reduce the 108-question form. The application had long been derided as too complicated and too labor-intensive for families, asking for detailed tax information.
To support Alexander’s effort, the Education Department’s Federal Student Aid office created a mobile app in 2018 with the capacity to eventually pivot to a shortened FAFSA, according to Arthur Wayne Johnson, who led the office at the time and is now running for Congress.
In a letter sent Thursday to Education Secretary Miguel Cardona, Johnson claims his office developed a short form in 2018 that included calculations to deliver more grant aid to students, which could have served as a framework for the new FAFSA later approved by Congress.
“This mobile app cloud-based technology and system, with fully functioning FAFSA, was handed over to the Biden administration … and killed off with malicious negligence,” Johnson said.
While employees at the Federal Student Aid office and congressional staffers confirmed the existence of the shortened form, some said it had little utility because there was no meaningful alignment with the law Congress passed in December 2020. The Biden administration retired the app in 2022 due to low usage and effectively scrapped the short form.
The Education Department said it assessed its options — including using the short form — and determined that substantial system changes were needed to revamp the financial aid form.
The 2020 legislation, dubbed the FAFSA Simplification Act, pared down the number of questions from 108 to 36 and increased the amount of income shielded from a formula used to determine aid eligibility. The changes expanded access to the Pell Grant, a form of aid for undergraduates with exceptional financial need.
Congress told the Education Department to have all of the work wrapped up by October 2022. Despite warnings from staff in the student aid office that it would be impossible to meet that deadline, a Trump administration official assured lawmakers it could be done, according to three people involved in the matter who were not authorized to speak publicly.
Lawmakers only expected the Education Department to redesign the application and update the underlying formula, according to people involved in negotiations, not replace the entire processing system.
“On the one hand, if you want a better-run, efficient program … the system needs to be updated. Now, did that update need to happen to make the improvements for the FAFSA? No,” said one congressional aide, who was involved in negotiations and spoke on the condition of anonymity because they were not authorized to speak publicly.
But the Education Department said the old system, which used an outdated programming language, would have hindered implementation of the new FAFSA. In 2019, the Government Accountability Office said the older system was among the 10 federal systems in most need of modernization.
Multiple priorities
When the Biden administration took over in 2021, former student aid staffers said the FAFSA update was treated as a purely technocratic venture that civil servants could manage on their own. Meanwhile, senior leaders at the department were also focused on other priorities, including a litany of new regulations and cleaning up poorly run student loan forgiveness programs.
Staffers said they tried to convince senior officials of the need for more time to complete the technology upgrades necessary to finish the new financial aid application. The student aid office wanted two extra years. Department officials asked Congress for one.
Lawmakers granted the request in June 2021 after learning for the first time that the department was remodeling the entire FAFSA system infrastructure, said McKibben, now the senior director of policy and advocacy at the Hope Center at Temple University.
To build out the new processing system, the Education Department tapped General Dynamics Information Technology, Accenture Federal Services, Peraton Enterprise Solutions and Jazz Solutions. When the vendors flagged problems in developing the system or missed deadlines, student aid staff said they felt like it was sometimes difficult to get political leadership to pay attention.
In August 2022, President Biden unveiled a plan to forgive up to $20,000 per recipient in federal student loans. The White House that fall pressed the student aid office to deliver a flawless process, according to three people familiar with the matter. That meant peeling off a few people from other projects, including the new FAFSA.
The Education Department pushed back against assertions that student debt relief contributed to delays in FAFSA, saying it played no role. The department said it made significant progress on the financial aid project in the summer and fall of 2022, including releasing guidelines to help students prepare for changes to the calculation of the formula for the need-based grant aid.
But Rep. Virginia Foxx (R-N.C.), chairwoman of the House Education Committee, said the focus on debt relief was a problem. “FAFSA imploded because the Biden administration has been so focused on marketing its flashy free college gimmicks that it forgot about doing anything to help students and families,” she said.
Some higher education advocates say congressional Republicans placed the Federal Student Aid office at a disadvantage by refusing to provide additional funding in 2022 to finish the FAFSA update.
“Legislators, appropriators put them in a bad spot,” said Wil Del Pilar, senior vice president at the Education Trust, an advocacy group. “The department was scrambling, trying to do all of this additional effort with no additional resources.”
Republicans had agreed to increase the office’s budget, but with a caveat that not a dime could be spent on Biden’s debt relief program, according to congressional staffers. Democrats and the White House balked at the offer, accusing the GOP of reneging on a promise not to include any conditions that were not featured in prior budget bills.
Foxx has pushed back against the assertions that a dearth of funding created the problems with the FAFSA. Poor management, she insists, is the source of the botched rollout.
In March 2023, the Education Department was still struggling with the FAFSA upgrades and announced the form would not debut until December, two months later than the traditional Oct. 1 rollout of the aid application. A person familiar with the project said problems persisted with General Dynamics Information Technology, which department officials had asked to bring on more engineers and project managers to stay on track.
A GDIT spokesperson declined to comment and referred questions to the Education Department.
In early 2023, the department had turned to U.S. Digital Service, created after the disastrous Healthcare.gov rollout to aid government agencies with technical projects. The tech agency helped with the FAFSA timeline and oversaw contractors on the project, according to the department.
A GAO report in June raised concerns about the Education Department staying on schedule and failing to account for the costs of the more than $336 million upgrade. To help it meet the December goal, records show the department hired Jazz Solutions to integrate the new system — work that experts say should have long been completed.
Deadline time
As the release date neared, lawmakers, colleges and other stakeholders say the Education Department kept them in the dark. Despite regular briefings to Congress on the FAFSA, congressional aides say the department did not divulge the problems it was contending with. College access and financial aid groups, not department officials, told lawmakers about the agency’s failure to update a crucial income formula in the FAFSA, these aides say. The department announced in January that it would update the formula, a month after The Washington Post reported on the problem.
As colleges grew anxious about delays in receiving FAFSA data and the potential impact on enrollment, Cardona made the rounds at conferences hosted by financial aid and admissions organizations in February. He assured schools that the department would do all in its power to support them through this challenging FAFSA cycle.
“I know it’s stressful right now,” Cardona told a room full of financial aid officers last month. “But a better FAFSA will be worth it.”
Still, the errors and delays, including last-minute communication of problems, have colleges losing trust in the department, said Justin Draeger, president of the National Association of Student Financial Aid Administrators.
He said the biggest objective at this point is getting students the financial aid packages they need to weigh offers. Many colleges have pushed back deadlines for deposits or other commitments to give students time to make decisions.
“The time for accountability and learning from all of this will eventually come. For now, our goal is to remain committed to getting this over the finish line for students,” Draeger said. “But when that day of accountability does come, I hope what we don’t find is that decisions were made to save face, or prioritize public relations over transparency and partnership with stakeholders and students.”