Five percent of FAFSAs will have to be reprocessed, ED says

The U.S. Education Department released additional details Tuesday on the scope and impact of the tax issue flagged last week by financial aid officers, the latest calculation error to beset the beleaguered rollout of the new FAFSA.

Five percent of all previously processed Institutional Student Information Records, or ISIRs, will have to be reprocessed, the department said—a little over 320,000 forms.

The issues stemmed from inconsistencies in tax data as it was transferred from the IRS to the department via the IRS’s data exchange, leading to miscalculations in student aid indexes and causing affected students’ forms to reflect less aid eligibility than they should.

Most of those inconsistencies were relevant only for the roughly 15 percent of FAFSA applicants who qualify for education tax credits. Five percent of those ISIRs were negatively affected by the error, and the department will reprocess them; the other 10 percent, which likely show more aid than students should be eligible for, will be left to colleges to resolve—or not.

“The Department expects that schools can move forward with packaging aid offers for over 80% of previously-submitted FAFSA applications—as those records are not affected by the previously-described issues,” the department wrote in a statement.

Justin Draeger, president of the National Association of Student Financial Aid Administrators, said that while he appreciated the speed at which the department investigated and acknowledged the misstep, the pile-up of errors since colleges began receiving ISIRs last month threatens to throw off even the heavily delayed timelines admissions and financial aid officers are currently operating on.

“Every day matters, and with hundreds of thousands of FAFSAs needing to be reprocessed, even more delays for students are coming,” he wrote in a statement. “Continually taking two steps forward and one giant step back is not a sustainable pathway toward getting financial aid offers out to students and families.”