The great FAFSA flop

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Mar 19, 2024 View in browser   By Bianca Quilantan Presented by the Financial Services Forum Students cross the campus of Dartmouth College, March 5, 2024, in Hanover, N.H. | Robert F. Bukaty/AP DAZED AND CONFUSED — It was supposed to be a new, simplified federal student aid form, a redesigned application that would make it easier for millions of families to fill out. It turned out to be an epic flop. The new Free Application for Federal Student Aid, or FAFSA, has become a massive election-year headache not only for President Joe Biden’s administration, but for colleges and families just trying to get their kids to college. The idea was noble enough. The complicated student aid form, long the bane of parents and students, was streamlined to allow some prospective students to answer as few as 18 questions, down from more than 100. And the application redesign updated how federal student aid eligibility is determined. More students than ever before were expected to be eligible for more aid, the Education Department touted earlier this year, and the form was supposed to make “it as simple and easy as possible for families to get help paying for college.” Instead, the new FAFSA is wreaking havoc on the college admissions cycle. School counselors have been grappling with a shorter timeline to advise students how to fill out the form, since the Education Department delayed its initial release by nearly three months. Some families have been struggling navigating technical glitches that have barred them from completing the form. Colleges have pushed back their decision day deadlines to make up for the Education Department’s delay in processing the applications. Education Department officials are still working on processing applications and incrementally rolling out vital financial aid data to schools. They’ve promised to send out hundreds of thousands more student aid records to colleges this week. But even after the records are sent to schools, the vast majority of the work colleges do to create financial aid packages is just beginning. Education advocates say it could take at least two weeks for institutions to review the data and send out financial aid offers to students. That’s barring any other issues — college financial aid offices have been navigating new software updates from the Education Department this month and long wait times to get help. At the earliest, some of the most well-resourced colleges may be able to send out aid award letters by mid-April. This means students might only have two weeks to choose a school if their pick hasn’t pushed back their May 1 decision deadline. Without the financial aid data expected to roll out fully this month, colleges can’t even begin to send out financial aid packages to their prospective students. And in turn, families can’t even begin to understand how they will pay for college. The Biden administration’s new FAFSA stems from a mandate to implement a bipartisan law Congress passed in December 2020 that overhauled the federal financial aid formula and mandated a new, simpler FAFSA. So who is to blame for the botched rollout? Lawmakers and administration officials are pointing at each other. The Education Department’s FAFSA debacle has drawn bipartisan criticism from lawmakers who have been demanding answers on when, exactly, the form will be fixed. Republicans have been the most critical of the rollout, arguing that the Education Department did not prioritize implementation of the new form and instead focused on its student loan relief efforts. Meanwhile, some Education Department officials have blamed the sheer complexity of overhauling the form, a lack of adequate funding from Congress and a last-minute change to the financial aid formula after the agency mistakenly failed to properly account for inflation. They are also privately pointing fingers at a major outside vendor, General Dynamics, which was tasked with building out and operating the new FAFSA processing system, for missed deadlines and delays. Wherever the blame lies, the effect the new form, its glitches and its delays are having on the graduating class of 2024’s prospects of heading to college in the fall are stark. FAFSA completion has long been considered correlated with the number of freshmen who show up to campuses in the fall. And through the first week of March, the number of high school seniors filling out the FAFSA was down by more than 30 percent, according to federal data analyzed by the National College Attainment Network, a nonprofit focused on helping students prepare for college. The drop in applications is even steeper at high schools in lower-income communities and those with large shares of Black and Hispanic students. Education Secretary Miguel Cardona isn’t satisfied with those submission numbers, and has urged colleges and school counselors to continue pushing students to fill out the form. “I want all your students filling out FAFSA,” he told school leaders Monday at the Council of the Great City Schools Annual Legislative and Policy Conference. “There is a reason we’re having these headaches and these delays, because it’s simpler now,” Cardona said. “It’s not just a new website. It’s a new formula. We’re expecting more dollars to go out, but they have to submit. The delays, in my opinion, once we get this thing going are … going to be worth it.” Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com. Or contact tonight’s author at bquilantan@politico.com or on X (formerly known as Twitter) at @biancaquilan.   A message from the Financial Services Forum: Independent studies have shown that raising capital requirements could cost the U.S. over $100 billion per year. Moreover, a new study by former Fed Governor Randall Kroszner warns that, as written, Basel III Endgame may shift more activity to less-regulated non-banks. See the research.   What'd I Miss? — Supreme Court lets Texas enforce new law allowing police to arrest migrants: The Supreme Court on Tuesday gave Texas the go-ahead to enforce a new state law authorizing police to arrest and detain people for illegally crossing the border from Mexico. The Texas law was supposed to go into effect on March 5 but was paused by the high court for two weeks while the justices considered emergency requests from the Biden administration and immigrant rights groups to keep the statute on ice while legal challenges to it proceed. — Trump laments $464M judgment, sues ABC News and George Stephanopoulos for defamation: Donald Trump on Tuesday posted a string of complaints lamenting the “practically impossible” $464 million he is unable to obtain a bond for in the civil fraud judgment against him, the day after hitting ABC News and George Stephanopoulos with a defamation lawsuit for an undisclosed sum. The former president’s lawyers said in a Monday court filing that “ongoing diligent efforts have proven that a bond in the judgment’s full amount is a ‘practical impossibility,’” including “approaching about 30 surety companies through 4 separate brokers.” Trump’s inability to pay raises the possibility that the state attorney general’s office could begin to seize his assets unless the court agrees to halt the judgment while the former president appeals the verdict. — Congress’ final funding deal is going down to the wire: Top lawmakers and the White House have finally reached a deal to close out the government funding fight that began more than a year ago, when Kevin McCarthy first took the speakership. But it’s already too late to guarantee the monumental bipartisan agreement isn’t punctuated by a brief government shutdown. Whether funding will lapse early Saturday morning for the Pentagon and key non-defense agencies is largely up to Speaker Mike Johnson, who will have to decide this week between three choices: Bend House rules to speed up passage, embrace a short funding patch to buy more time — or let federal cash stop flowing to most federal programs for a few days.   JOIN US ON 3/21 FOR A TALK ON FINANCIAL LITERACY: Americans from all communities should be able to save, build wealth, and escape generational poverty, but doing so requires financial literacy. How can government and industry ensure access to digital financial tools to help all Americans achieve this? Join POLITICO on March 21 as we explore how Congress, regulators, financial institutions and nonprofits are working to improve financial literacy education for all. REGISTER HERE.     Nightly Road to 2024 ‘WHACK JOBS AND MORONS’ — Wisconsin’s top Republican derided supporters of former President Donald Trump who are trying to recall him from office as “whack jobs and morons,” predicting Tuesday that their effort would fail and they would be subject to fraud charges, writes the Associated Press. Assembly Speaker Robin Vos is being targeted for recall because he refused to impeach the state’s top elections official or proceed with attempting to decertify President Joe Biden’s 2020 victory in Wisconsin. His actions angered Trump, who accused Vos of covering up election corruption, while Trump’s followers mounted an unsuccessful primary challenge in 2022 and are now trying to force a recall election. TRUMP’S OHIO TEST — Donald Trump is once again intervening in a crowded Senate primary here to boost a MAGA candidate. But this time, the establishment thinks it can stop him. Some of the biggest names in Ohio’s old GOP guard have coalesced behind state Sen. Matt Dolan, who they view as best positioned to beat the incumbent Democrat, Sherrod Brown. Former car dealer Bernie Moreno, meanwhile, has the backing of Trump and the MAGA elite, including Sen. J.D. Vance, the Ohio Republican who Trump lifted out of a messy primary two years ago. SPENDING BIG — A new $120 million pledge to lift President Joe Biden and his allies will push the total expected spending from outside groups working to re-elect Biden to $1 billion this year, writes the New York Times. The League of Conservation Voters, a leading climate organization that is among the biggest spenders on progressive causes, announced its plans for backing Biden on Tuesday, at a moment when his Republican challenger, former President Donald J. Trump, is struggling to raise funds. Biden’s campaign, independent of the outside groups, expects to raise and spend $2 billion as part of his re-election bid. Republican groups are likely to spend big ahead of November, as well, but it is difficult to make direct comparisons between the Democratic organizations and their Republican counterparts. Democratic and progressive organizations often announce their spending plans before they have raised the funds, which often come in from small donors. Republican groups that rely more on major donors tend not to telegraph their plans.   A message from the Financial Services Forum:   AROUND THE WORLD Former President Jair Bolsonaro addresses supporters during a rally in Sao Paulo, Brazil, Feb. 25, 2024. | Andre Penner/AP BOLSONARO INDICTED  — Former Brazilian President Jair Bolsonaro was formally accused Tuesday of falsifying his Covid-19 vaccination data, marking the first indictment for the embattled far-right leader, with more allegations potentially in store, reports the Associated Press. The federal police indictment released by the Supreme Court alleged that Bolsonaro and 16 others inserted false information into a public health database to make it appear as though the then-president, his 12-year-old daughter and several others in his circle had received the Covid-19 vaccine. DILUTED DEAL — European Commission President Ursula von der Leyen has tempered her plan to use the proceeds of frozen Russian assets to buy weapons for Ukraine. The EU executive will propose on Wednesday that a fraction of the approximately €3 billion derived from the immobilized assets this year will also provide non-military support to the war-torn country, according to a document seen by POLITICO. It is expected that this will amount to 10 percent, while the remaining 90 percent would be earmarked to buy arms, two officials said. Following the Commission's proposal, the issue will be discussed by EU leaders at a summit in Brussels on Thursday. Capitals are exploring ways of replenishing Ukraine’s dwindling arsenal as Russia’s invasion grinds into a third year. The bloc aims to get the money to Ukraine by July. Nightly Number 10% The increase in medication abortions in the U.S. in the first full year after the Supreme Court overturned Roe v. Wade in 2022, according to a new study. RADAR SWEEP POT OF GOLD — If it feels like the Irish hunks are dominating culture right now, you’re not wrong. Cillian Murphy just won an Oscar for “Oppenheimer.” Barry Keoghan has become the nation’s latest heartthrob after starring in “Saltburn.” Paul Mescal and Andrew Scott both received critical acclaim for their roles in “All of Us Strangers.” What’s the pull? Maybe it is their accents. Maybe it is their politics. Maybe it is their “uncontrived, almost peculiarly Irish, modesty.” What’s for sure is that Americans are crushing hard for the Irish right now, and recent box office numbers prove it. Read more about the craze from Sadiba Hasan in The New York Times.   A message from the Financial Services Forum: The new capital regulations also mean some foreign businesses will be able to borrow at lower costs—putting U.S. companies at a disadvantage. Business and manufacturing groups, state and local elected officials, affordable housing advocates, clean energy proponents, civil rights organizations, and individuals across the country have raised significant concerns with the proposal. It's time to scrap Basel III Endgame and start over. Learn more.   Parting Image On this date in 1970: Holding hands and singing, three female defendants in the Sharon Tate murder case walk down a Los Angeles Hall of Justice corridor for a pre-trial hearing. The women from left are, Susan Atkins, Patricia Krenwinkel, and Leslie Van Houten. All three were sentenced to death, which was then commuted to life imprisonment. Van Houten was granted a retrial and was released on parole in 2023, while Atkins died in prison and Krenwinkel remains in prison. | Harold Filan/AP Did someone forward this email to you? Sign up here.   Easily connect with the right N.Y. State influencers and foster the right relationships to champion your policy priorities. POLITICO Pro. Inside New York. Learn more.       Follow us on Twitter Charlie Mahtesian @PoliticoCharlie Calder McHugh @calder_mchugh   Follow us

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