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Department of Education failed to treat student tuition aid notifications as mission critical

Article published in the Philadelphia Business Journal June 17, 2024.

Applying to college is stressful as is, without the process being impacted by delays in knowing how much federal tuition aid an applicant will be receiving. These delays impact not only the applicant, but also the colleges making admission offers to students.

This year, the annual process of informing college-bound students of their federal tuition aid package has been a fiasco due to numerous issues with the redesigned Free Application for Federal Student Aid (FAFSA) form launched by the U.S. Department of Education.

The new FAFSA form was released in December, two months later than usual, but was not adequately tested. “How FAFSA ‘fixes’ have turned College Decision Day into chaos” is the headline of a May 1 USA Today column. It outlines in detail the multitude of issues faced by families attempting to access the online form and once completed, the difficulty in the form being successfully processed by the Department of Education.

So, how does the financial aid system work? The college applicants who fill out the FAFSA form receive government aid based on financial need. That financial aid will go directly to the college in which the student enrolls. The college, based on both merit and financial need, will decide on the scholarship they will award to applicants, which becomes part of the applicant’s offer of admission. The applicant then decides which college they want to attend. Delay in processing the FAFSA form delays the entire college application and admissions process.

Richard Cordray, chief operating officer of Federal Student Aid within the Department of Education, is responsible for the FAFSA fiasco. He didn’t consider the flawless operation of the new FAFSA system as mission critical. On April 26, Cordray announced that he would be stepping down from his position in June. He should have been terminated.

Photo credit: SAMANTHA GÜT

What was Cordray thinking? Can you imagine launching a new system that is mission critical to the college application and admissions process for millions of college applicants without running the new system in parallel with the current system to ensure it works without error? Would the FAA launch a new air traffic control system without testing it to ensure the new system runs flawlessly?

With the headwinds faced today by many colleges (increasing financial pressures, declining number of high school graduates and the questioning of the value of a college education), the FAFSA fiasco only deepens the challenges faced by smaller, less financially stable colleges. The FAFSA fiasco most likely was a factor in the closing of University of the Arts on June 7.

Federal aid flows to students in financial need. The FAFSA fiasco disproportionately hurts lower income families and the ability of their children to get a college education.

According to the State Higher Education Executive Officers Association, more than 30 colleges have closed in 2023. Prior to 2023, the most closures in any year was 13. More will close or merge in the future due to financial pressures and declining enrollments. Many of these smaller colleges are significant financial engines of the communities in which they are located, adversely impacting these communities when they close. The FAFSA fiasco exacerbates this issue.

Historically, college decision day is May 1 of each year. It is now mid-June. According to a college admissions officer, many colleges are running significantly behind the number of deposits they receive for September enrollment, compared with prior years. This impacts the financial planning of these institutions for the upcoming academic year, and will only lead to more consolidation within the higher education industry.

What is the major lesson of the FAFSA fiasco? If a system is mission critical to the success of an enterprise, run the old system in parallel with the new system until it’s debugged, before ceasing operation of the old system. Not doing so is irresponsible and has far reaching adverse consequences.

Stan Silverman is a former CEO and author of “Be Different! The Key to Business and Career Success.” He is also a speaker, advisor and widely read columnist on leadership. He can be reached at stan@silvermanleadership.com.

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