Jill On Money: Student loans — Past and present
Welcome to the 2024 college acceptance season, which has befuddled and elated students and their families.
Normally, this is the time of year when I remind you that financial aid packages are not always what they seem to be.
Families often confuse loans, which must be repaid with interest — and grants, which is essentially FREE money.
This year, the problem is even more problematic due to the FAFSA fiasco.
If you have not followed the drama around FAFSA, here’s a quick synopsis: Because there had long been complaints about the Free Application for Federal Student Aid (FAFSA) form for federal financial aid, the government overhauled the whole thing.
The promise was that applicants would be able to utilize a streamlined form and process for the 2024-25 school year. The NEW FAFSA was supposed to save time and help more families qualify for federal loans, but from the early days of the rollout, there has been widespread frustration and complaints.
The good news is that the initial technical issues that caused delayed applicant submissions have mostly been resolved. But there is now another problem: Some colleges received incorrect information from the government.
The Department of Education (DOE) acknowledged the problems in late March and provided daily updates to help families make FAFSA corrections and to navigate the process. The department notes that a whopping “30% of FAFSA forms are potentially affected” by known processing or data errors.”
OK, so where does this leave borrowers?
Some families are in a holding pattern until they receive their financial packages. DOE expects that most of the problems should be resolved by the end of April. As a result, many colleges are pushing back their usual May 1 deadlines to allow applicants more time to make a final decision on which college they will attend.
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