After bungling financial aid process, Ed Dept. begins testing new FAFSA

The Education Department will open the new federal financial aid application for a beta testing period on Tuesday, as the Biden administration tries to avoid another disastrous rollout of the form.

This year's launch of the Free Application for Federal Student Aid, or FAFSA, will be closely watched on Capitol Hill, where lawmakers have been critical of the department's handling of the revamped form. Congress had mandated the department streamline the application to deliver more money to college students, but technical glitches and bureaucratic delays prevented many students from completing the FAFSA and receiving timely aid offers this year.

Now, the Education Department is testing the functionality of the 2025-2026 application to identify and fix problems before widely releasing the form in December. In the first of four rounds of testing, 1,000 students working with community-based organizations, such as the Scholarship Foundation of Santa Barbara and the Scholarship Fund of Alexandria, will have access to the new form.

In a typical year, about 17 million students fill out the FAFSA, the gateway to billions of dollars in grants, scholarships and loans to pay for college. The Education Department usually releases the form on Oct. 1 but has missed that deadline for the second year in a row. Everyone who submitted a FAFSA for the 2024-25 school year faced delays because the department was late in sending colleges student data needed to create aid packages. Some students started the semester without a final accounting of how much financial help they would receive. The department is trying to turn that disaster around.

"We're testing a complete FAFSA system," Undersecretary of Education James Kvaal told reporters Monday. "That means that students will begin submitting FAFSA forms with hands-on advice and support of experts. The department will process those FAFSA, give students an opportunity to make corrections if needed and send the records to colleges and state agencies."

The beta testing period arrives on the heels of two damning reports on the department's execution of the redesigned FAFSA released last week by the Government Accountability Office. The government watchdog found that the department neglected to thoroughly test the application last year and senior management in the office of Federal Student Aid signed off on the form despite knowing it was far from ready to be released.

The GAO also found that the aid office decided not to address 18 of the 25 key requirements in launching the form, including the system's capability to determine final aid eligibility and distribute those results to colleges — a critical function of the FAFSA. GAO investigators said the department underestimated how many families would seek help with the aid form and failed to staff up its call center. About 4 million of the 5.4 million calls to the department went unanswered in the first five months of 2024.

GAO officials detailed the Education Department's missteps at a House higher education subcommittee hearing last week, where they and lawmakers expressed little confidence in the agency's ability to successfully deliver the 2025-2026 form.

After calling the FAFSA rollout a "total mess," Rep. Robert C. "Bobby" Scott (Va.), the top Democrat on the House education committee, asked Marisol Cruz Cain from the GAO whether she thought the department's IT contractors could do a better job this year.

"If FSA oversees the contract and follows the best practices for systems development ... they could deliver the functionality," Cruz Cain told Congress. "If they keep managing it they way they are, I don't have confidence that they'll be able to deliver the functionality."

For its part, the Education Department released a 10-page report last week noting that it has hired new experts, added hundreds of customer service representatives and will be conducting extensive testing, among other changes.

Still, problems from the 2024-2025 cycle continue to haunt the department. On Monday's call with reporters, FAFSA executive adviser Jeremy Singer said the department is having trouble with corrections on the paper forms and is exploring workarounds. Processing those paper forms is already months behind schedule and preventing some students from finalizing funding for the semester that is already underway.

What's more, there are still more than 20 unresolved problems from the 2024-2025 form used by students and families, some of whom are still waiting for a final financial aid package for the current school year. Some colleges have extended aid while students try to complete the process. Kvaal said the department has addressed the most critical issues and does have workarounds for many of the lingering glitches. Singer said the agency will "start methodically working on the less impactful bugs over the long term."