In an 'unforced error,' the feds just botched financial aid data for roughly 200K students

The U.S. Department of Education sent hundreds of thousands of inaccurate student financial aid assessments to colleges in recent weeks, it acknowledged Friday – an error it blamed on an outside vendor.

Although the announcement said the problem has been resolved, it likely will further delay financial aid offers to college and high school students.

Critics described the oversight as the latest misstep in the Biden administration’s rollout of the new Free Application for Federal Student Aid, or FAFSA, a college financial aid form used by millions of students every year. A congressional mandate to streamline the form has been beset with glitches and blunders, eroding trust between colleges and the federal officials they rely on to help them dole out financial aid to students.

Read more: Millions of students may have just weeks to compare college financial aid offers

Problems with outside contractors have dogged the rollout of the new form from the start. The federal government secured a multi-million dollar contract in 2022 with the company General Dynamics Information Technology to modernize the Education Department’s aid processing systems. General Dynamics was also involved in the launch of Obamacare.

The department did not specifically identify which vendor it was blaming, and in such large projects, multiple vendors and subcontractors are often involved. General Dynamics in particular has been a sore subject in the Education Department in recent months, as some officials in the office that oversees the FAFSA have quietly griped the vendor isn’t getting enough of the blame for some of the glitches.

Now, many colleges are once again left waiting on the federal government as they scramble to pack what is usually months’ worth of work into a matter of weeks.

While many institutions have their own forms of financial aid, they start with a foundation from the federal government. And they depend on the Education Department to collect applicants' financial information. In a statement Friday, Justin Draeger, the president of the National Association of Student Financial Aid Administrators, underscored that colleges and universities can only work with valid and correct data provided to them by the government.

“This is another unforced error that will likely cause more processing delays for students," Draeger said. “At this stage in the game and after so many delays, every error adds up and will be felt acutely by every student who is counting on need-based financial aid to make their postsecondary dreams a reality."

What happened? 

The Education Department miscalculated the amount of money that roughly 200,000 students could afford to pay for college, potentially giving more financial aid to students with more money.

The agency’s formula for crunching those numbers requires officials to include how much students who depend on their parents’ incomes also have in their own savings and checking accounts. The net worth of any other investments, or cash, the student has is supposed to be part of that calculation, too.

But it wasn’t – at least until Thursday, when the department stopped sending out incorrect data. In a statement to USA TODAY, an Education Department spokesperson confirmed the oversight as a “vendor issue” that will not affect any future records.

“We remain focused on helping students and families through this process and supporting colleges produce aid offers as quickly as possible,” the spokesperson said.

Read more: Does the new FAFSA actually hurt farm families? It depends who you ask.

The hundreds of thousands of erroneous calculations are now being reprocessed, according to the agency. On a call with college financial aid staff on Friday, officials said the department doesn’t have a specific timeline yet for fixing those applications.

They encouraged schools to send affected students tentative aid offers in the meantime. But that recommendation didn’t sit well with everyone.

“It is not feasible or realistic to send out incorrect FAFSA data and ask thousands of schools to make real-time calculations and adjustments to the federal formula on the school side,” Draeger said.

Slow trickle of student data flows to colleges

After months of waiting, student data finally began flowing to colleges last week. The more than 1.5 million applications the department has processed to date are still a fraction of the roughly 6 million the department received by mid-March.

Alyssa Dobson, the director of financial aid and scholarships at Slippery Rock University, a small public institution in Pennsylvania, said her school has received some student data. But after Friday’s announcement, certain applications will have to be reprocessed.

“Until that time, we are in a holding pattern,” she said.

Dobson’s school is one of dozens that have extended their deadlines beyond the typical May 1 date by which most students have to select a college. They pushed it to May 15, though administrators are now in talks to extend it into June.

Zachary Schermele covers education and breaking news for USA TODAY. You can reach him by email at [email protected]. Follow him on X at @ZachSchermele.

This article originally appeared on USA TODAY: Feds botch college financial aid data for roughly 200K students