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Education Department to Fix FAFSA Formula Error

Education Department to Fix FAFSA Formula Error

Inside Higher Ed

Katherine Knott
January 24, 2024
The U.S. Education Department will fix an error in the formula that determines how much financial aid a student can get, which would have cost students about $1.8 billion, the agency told NPR Tuesday.
When creating the new Free Application for Federal Student Aid and updating the underlying formulas, the department failed to adjust for inflation the amount of income to exclude from aid eligibility calculation. That means families would be eligible for less financial aid in a year when they were supposed to benefit from a more generous income-protection allowance.
Advocacy groups flagged the error in October, and The Washington Post reported on it in December, but the Education Department didn’t fix the mistake before the form went live.
Tuesday’s announcement didn’t say when the formula would be updated, and the timing of the fix could create further complications for university financial aid administrators already dealing with tight deadlines.
The department hasn’t started sending completed FAFSA forms to colleges yet. If its officials fix the formula after colleges process those forms and send aid offer letters, financial aid offices could have to go back and recalculate their offers. Or the department could hold off on sending the forms to colleges until it fixes the error, which would delay when students receive the aid letters that outline the costs of an education and the money available to them to help pay for it.
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