The Biden Administration has Notified Congress that it needs more Time to Implement a Bipartisan Law Overhauling how Students apply for Federal Financial Aid, citing Challenges with Decades-old Technology at the Education Department. The Change to the Federal Financial Aid Formula that Congress Approved is expected to allow the Education Department to Reduce the FAFSA From 108 Questions to 36 Questions.
Congress included the Changes to the FAFSA as part of the Year-End Government Funding and Covid Relief Package that Trump Signed in December 2020. Simplifying the Form was a Longtime Priority of Sen. Lamar Alexander (R-TN), who Retired in 2020..
Rich Cordray, the Chief Operating Officer (COO) of Federal Student Aid, which is responsible for Implementing the Changes, said that his Office was “hard at work modernizing the FAFSA system.” “To deliver on these new opportunities, FSA first needs to update the technology system that the FAFSA form is built on. Believe it or not, the current system is 45 years old, and though we have made it work all these years, it’s just too limited to support these new changes.” Cordray added.
Department Officials said the New, Simplified Application for Federal Financial Aid, that Congress Approved last year, will Not be ready in time for the 2023-24 Academic Year, as Required by the Law. The Department instead plans to roll out the Redesigned Form, the Free Application for Federal Student Aid, a year later, by the 2024-25 School year.
Republicans and Democrats overseeing Education Policy on Capitol Hill, are Negotiating over a Legislative Fix that would give the Education Department more Time to Implement the new FAFSA. Department Officials said they are providing Technical Assistance to Lawmakers who are working on a Legislative Fix, but had Not Formally proposed Specific Language to Congress.
Education Department Officials also emphasized, that in the coming months, they will be carrying out other Changes to Student Aid, that Congress Passed last year ahead of Schedule. Cordray said in the Blog Post that Students would start seeing those Changes by Oct. 1st, 2020:
- Implement the Repeal of the Limit on how Long Borrowers could Attend School without Accruing Interest on their Need-Based Federal Student Loans.
- Eliminates the Requirement that Male Students Register with the Selective Service before they receive Federal Student Aid.
- Removes Restrictions on Students with Drug Convictions Receiving Aid.
While the Questions regarding Selective Service and Drug Convictions will Remain on the FAFSA until the 2023-24 school year, the Department will Not factor the Answers when Determining the Eligibility for Aid.
The Education Department’s Implementation of the FAFSA Changes is happening in Tandem with another Law that Congress Passed in 2019 to Allow the Agency to more easily Receive Taxpayer Information of Student Aid Applicants and Borrowers. The Bipartisan Data-Sharing Law, known as the FUTURE Act, is meant to Allow the Education Department to determine a Student’s Eligibility for Financial Aid by Automatically Verifying Family Income Information directly from the IRS.
There is No Sspecific Deadline for Implementation of these Changes, but Department Officials said the Automatic Data-Sharing Feature would Not be Available on the FAFSA Form until the Streamlined FAFSA Debuts in 2024-25. Until then, Borrowers can Continue to Use the Data Retrieval Tool which Directs families to an IRS Website from which they can Import their Tax Information into the FAFSA.
The FUTURE Act is also meant to allow Federal Student Loan Borrowers to Automatically Enroll in and Remain Enrolled in Income-based Repayment Programs without having to provide Documentation of their Income Information.
The Biden Administration’s Budget request for the coming 2022 Fiscal year starting Oct. 1st seeks nearly $195 Million to Implement the Sweeping Changes that Congress has made to Student Aid in recent years, a nearly 90% boost from the previous year.
The Money will Help Pay for Technology and a Modernization of Back-End Systems that Process Applications from Students seeking Financial Aid or from Borrowers seeking to Enroll in Income-based Loan Programs.
Some of the Proposed Funding will Help the Education Department work with Colleges, States, and Scholarship Organizations to Update their own Systems to Accommodate the New FAFSA, according to the Department.
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