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Published July 21, 2024

Changes to FAFSA apps lead to slowdown for UMN, other colleges

Financial aid administrators say the problem is largely under control.

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A change in the federal student aid application has been causing headaches and slowdowns in some colleges’ financial aid offices this year.

Updates to Free Application for Federal Student Aid requirements have forced some student aid administrators to sort out data discrepancies by hand, a process that can be time-consuming when hundreds of applications are affected. Employees at the University of Minnesota and other Big Ten schools say the process is a nuisance but largely under control.

The U.S. Department of Education made two alterations to the FAFSA application this year, said Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators.

The application now opens in October instead of January, and it uses two-year-old income information rather than year-old data, he said.

This income data has caused holdups at some institutions, said Larry Bloom, University of Minnesota student services manager.

Since the 2016-17 application and 2017-18 application both use income data from 2015, the income information a returning student enters this year should match the data they entered in last year’s application. If it doesn’t, the application is flagged with a Code 399, and financial aid officers have to sort out the problem by hand, Bloom said.

“We take every one of those FAFSAs with the 399 code, and we compare the two years and try to figure out how to resolve it,” Bloom said.

Officials usually have to contact the student to request information to solve the problem, he said.

The federal government expected that this might lead to slowdowns, and it alerted institutions in advance. The department warned schools to expect between 3 and 5 percent of all applications to be flagged with the code, Bloom said.

So far, Bloom said it’s more of a nuisance at the University than a serious problem. About 250 applications have been marked with Code 399, but officials anticipate more because it’s still early in application season, he said.

University employees don’t expect any delays in aid disbursement, Bloom said, but students should submit their FAFSAs early to avoid problems. If they wait until the summer, and their applications are flagged with a Code 399, that could lead to delays, he said.

Though this is an inconvenience for many schools, the switch benefits students and families, Draeger said, because students can complete their FAFSAs earlier.

Now most people will have their taxes done by the time they apply, and they can simply import their IRS data into the FAFSA form rather than manually entering the information, he said.

To prevent any problems, Bloom said students should use the IRS data retrieval tool, which takes information directly from an individual’s taxes and imports it into the FAFSA, which eliminates any chance of inconsistencies.

Other Big Ten schools have reported mixed experiences with Code 399 so far this year. Some, like Ohio State University, have experienced an increased workload for aid administrators but have avoided slowdowns because of extensive campaigns encouraging families to use the IRS data retrieval tool, said Executive Director of University Student Financial Aid Diane Corbett.

Pamela Fowler, executive director of the Office of Financial Aid at the University of Michigan, said that 548 of about 10,200 FAFSAs processed so far have been flagged — about 5 percent of all applications.

University of Michigan financial aid administrators are hopeful the DOE will come up with a solution this month, Fowler said. Until then, they are focused on new students’ applications in hopes that the issue will be resolved by the time administrators return students’ applications. 

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