The 2024 College Financial Aid Mess

00:05
Speaker 1
Could you introduce yourself and tell us a little bit about you and your family?

00:08
Speaker 2
Yeah. My name is Monique Cespades. We live in a little town called Maiden, North Carolina. My husband and I, Johnny, have two daughters, Vanessa and Maya. Maya is an 8th grader and Vanessa is in her senior year of high school. And we have a pig. Her name is Ashley. A pig? She lives outside? Yeah, that's Vanessa's pet. We've had her probably for about six years.

00:34
Speaker 1
Monique's family also has two dogs, two cats, a bird and a hedgehog. I want to hear more about your daughter Vanessa. So you said she's a senior in high school. What kind of teenager is she?

00:46
Speaker 2
I don't want to just say she's the best teenager because she's my child, but she's really an exceptional teenager. Vanessa is an outstanding young lady. She does really well in school, and she's also an athlete. And she's know a volunteer in the community and also sits on the youth city council.

01:12
Speaker 1
Well, you sound very proud of her. Are you ready for her to go to college?

01:16
Speaker 2
I'm not ready for her to go. No, I'm not ready for her to go. And I mean, she's not ready to go.

01:25
Speaker 1
Monique works for the county government and her husband works in construction. Neither went to college, so Vanessa's application is new for them. Part of the process is the financial aid form known as FAFSA, and many parents, including Monique, find it challenging. This year, the federal government said the form would be available by December 31. Monique hoped that by submitting the application as soon as possible, she could get Vanessa's financial aid information right away. So she was on high alert, waiting to fill out the form.

01:57
Speaker 2
Everybody's partying, waiting to count down, having drinks, family over food. You're in the middle of a holiday event. And here all I could think about was getting past midnight so I could get to this form ASAP. I had the website already ready to go and ready to launch at the count of midnight. Stroke of midnight. Cinderella's not waiting for her ball. She's waiting for the FAFSA form to open.

02:23
Speaker 1
So you're at your computer. Midnight strikes. Happy new year 2024. What happens?

02:29
Speaker 2
Right? I'm hurrying up, throwing my kiss. I'm like, okay, move over. I'm like, getting in my computer. Everybody's like, what is she doing? And I'm like, I'm trying to get into this FAFSA form. And I get into the form and it's like a big pink message, like it's some type of error, and I'm trying to click on start the new form or something, and it's there as an option, but there's nothing to click on. So I'm like, what's going on? I'm clicking. This is not working.

03:02
Speaker 1
The system was frozen, and it was just one of many issues that families are facing this year as they navigate college financial aid.

03:14
Speaker 2
So now I'm like, oh, my goodness. This is a new year's letdown. The ball really dropped on this one.

03:24
Speaker 1
Welcome to the journal, our show about money, business, and power. I'm Jessica Mendoza. It's Friday, January 12. Coming up on the show, the messy rollout and unexpected consequences of the new FAfSA.

03:53
Speaker 3
This episode of the journal is brought to you by sponsor C three AI. C three generative AI equips enterprises with verified, traceable answers. It's secure, hallucination free, LlM agnostic, and IP liability free. Learn more at C three AI. This is enterprise AI.

04:20
Speaker 1
And so, in five words or less, how would you describe the rollout of this new FafSa?

04:27
Speaker 4
I would say the rollout of this new FAfSA has been bumpier than expected.

04:32
Speaker 1
That's my colleague Oyen adedoyan.

04:35
Speaker 4
And parents and students took to social media like TikTok and Twitter and Instagram to express their frustrations. A lot of people were comparing FAFSA to Ticketmaster, and they were wondering why it was taking so long for them to get access to this form that they needed. No, because the fact that this FafSA form is still not open.

04:58
Speaker 2
Oh, I can't do this anymore. This got to be a joke. It is literally, I'm waiting. I'm literally waiting. I'm stressed. I need my money, man. I need it fast. Are y'all having similar problems?

05:15
Speaker 1
What does FAfSA actually stand for?

05:18
Speaker 4
The FAFSA is the free application for federal student aid, and it is a form that the education department distributes for students to fill out while they're applying for colleges and universities to assess how much federal aid they may qualify for. Now, this information is then also shared with states as well as individual institutions. So your colleges and they access this information and decide how much they want to award you, whether that's in grants or work study participation or things like that. So this big piece of information is taken and then interpreted by a variety of different institutions.

05:58
Speaker 1
Right. And so it's really an important document in that sense, because it determines how much aid you're able to get from all of these different stakeholders.

06:08
Speaker 4
Yes, exactly.

06:10
Speaker 1
Students and their families who want financial aid have to fill out the FAFSA every year, and most people fill it out online. This school year, the Department of Education made some big changes to the FAFSA.

06:24
Speaker 4
This is the first year in a long time that the FAFSA as we know it has been completely overhauled. And that is, in simple terms, because of something called the FAFSA Simplification act of 2020. And the reason that this law was established was because lawmakers were concerned about barriers to the FAFSA. The former FAFSA was really long, and it was complicated. People have to go back to their tax documents and put in line items. That can be really difficult and complicated for parents and students who are in unique situations. Maybe if you are in a family that's divorced or if your parents are immigrants or undocumented.

07:07
Speaker 1
The new FAFSA shrunk from about 100 questions to around 40. The government also changed how it calculates aid packages, all in the name of making the process more user friendly so that more people could get more financial assistance, people like Monique's daughter, Vanessa. Have you been saving for Vanessa's college education for a while?

07:31
Speaker 2
Not the way that we planned, especially with the way that the economy has become over the past few years. Unfortunately, it's a little struggle for our family in particular, because we're just a modest, I would say we're just a low to moderate income family, and so we didn't get to save as much.

07:50
Speaker 1
Would you say that paying for college is going to be one of the top one or two most expensive things that you're going to have to pay for in your life?

07:59
Speaker 2
Oh, absolutely.

08:00
Speaker 1
Vanessa's applied to four schools, a mix of public and private institutions whose tuitions range from about $28,000 to more than $40,000 a year. Is there one that she wants to go to more than any of the others?

08:15
Speaker 2
Yes. Wingate University.

08:19
Speaker 1
Wingate is a private liberal arts college in North Carolina, and of the four schools, it's the most expensive one. I mean, how do you feel when you see that price tag?

08:30
Speaker 2
I want to pack Vanessa back up, maybe pre think about having kids, start back all the way back from the very beginning and start saving dollar one. Yeah, but that's not realistic just because we may not have all the finances. It means that we just have to be resourceful and find ways to try to find those finances and find ways to try to work harder to make it work for her so she can make those dreams a possibility.

08:58
Speaker 1
Monique was eager to jump into the financial aid process. But because of all the changes, everything was delayed. The FAFSA application usually opens up on October 1, but this year, the government pushed back the release of the form by almost three months. And then with the website issues, some applications were delayed further. All this matters because it means students may have to make decisions about where to go without knowing what their financial aid looks like. When you first heard that the timeline was going to shift this year, what did you think? How did you feel about that?

09:37
Speaker 2
Vanessa's the first generation, so we don't really have that experience as to what are we supposed to do, the steps that you're supposed to take? And so were just told that generally in the past, there was ample enough amount of time. When they did it in October, okay, when they were like, okay, now it's two months later, then I'm kind of like freaking out because I'm like, okay, well, if it's in December, you're like, okay, wow. Because then it's like, you have to really start narrowing it down, making a commitment, putting money and payments down to secure your spot, preparing to buy things for the dorm because you don't want to be rushed at the last minute, running around. So then it's like, okay, well, December really puts you running around right away.

10:21
Speaker 1
There were a lot of glitches at first. The website didn't load. Monique stayed up until 05:00 a.m. Trying to make it work. She tried to reach out to the federal student aid office but didn't hear back. Here's my colleague oyen again.

10:37
Speaker 4
Periodically, the education department would take the FAFSA down to fix any glitches or bugs that they were noticing in real time. But for parents and students who were filling it out during that time, they saw it as maybe not being able to access the form, maybe getting kicked out of the form halfway through, or not getting certain email verifications or confirmations from the form. So financial aid advisors and financial aid offices were already gearing up for some pretty major challenges. But in conversations with those folks, I've heard that it's even more of a headache on every level. So parents and students are stressed out, financial aid officers are stressed out. Individual institutions are trying to figure out what they can do to make this easier for parents. So on all levels, people are pretty frustrated with the rollout.

11:30
Speaker 1
And it's not just annoying glitches with submitting the form. Other issues with the new FAFSA could also have a direct impact on people's wallets. That's after the break.

11:48
Speaker 3
This episode of the journal is brought to you by sponsor c three AI. C three generative AI equips enterprises with verified, traceable answers. It's secure, hallucination free, LLM agnostic, and IP liability free. Learn more at c three AI. This is enterprise AI.

12:15
Speaker 1
Monique was finally able to submit the FAFSA a few days into January. Usually that information goes immediately to the schools, who are the ones that formulate the final aid packages. But all these delays have caused more delays. The schools don't have that information yet, and so they can't give final aid packages to families like Monique's.

12:38
Speaker 2
Well, that's another letdown. I mean, it just means that we're still in limbo. So, I mean, the school still has to get this information that they sent over, and then they still have to come up with all these packages and calculate all these numbers for the students that have applied. So when realistically, am I finding out then? April.

13:01
Speaker 1
Some colleges require nonrefundable deposits to hold a student's spot. With everything pushed back, some families have had to pay those deposits before they know what their financial aid packages look like.

13:12
Speaker 2
Some of these deposits that the universities want, that I checked, they're refundable up until May 1.

13:20
Speaker 1
Right?

13:21
Speaker 2
She applied to, what, four different schools? $300 apiece is one, $200 to potentially not even get that money back.

13:29
Speaker 1
Ultimately, Monique just wants to know what her family needs to pay for her daughter's education.

13:36
Speaker 2
And what we get for financial aid is going to make or break and eliminate some of these possibilities by what we can afford. I mean, would I like to afford 15,000 a semester? But I don't even know if I'm really faced with that. That's the thing, because it's like, okay, I could get another job. I could do this, I could do that. But it's like I don't even know what I'm looking at that I would have to even cover. Right?

14:05
Speaker 1
You don't know what the goal is yet because you have no idea what the options are, right?

14:08
Speaker 2
Am I looking for a part time gig? Am I looking for something just on the weekends? Do I need two full time jobs now? Like, what's going on?

14:21
Speaker 1
And it's not just timing and logistical issues. There have been problems with the new financial aid formula, too.

14:27
Speaker 2
But then I was reading on Twitter that it's been discovered that with the new rollout of this form that they may not have added in a inflation tool that was originally supposed to be designed for this form.

14:43
Speaker 1
Twitter was right. The government made a mistake and didn't add inflation into its financial aid formula this year.

14:50
Speaker 2
And so if they do make any changes to the form that reflects inflation versus our financial income, however that was calculated could possibly mean that would be a lower financial aid package that would be offered to us. So I got a headache.

15:12
Speaker 1
Yeah, I was going to ask, how do you feel about all of this?

15:16
Speaker 2
I just feel like this just wouldn't be as challenging. And I feel like there needs to be a group therapy session with other parents, so I guess we don't feel so crazy.

15:29
Speaker 1
My colleague Oyen says that as of now, it's unknown if the federal government will fix the inflation error this cycle or wait until next school year. The Department of Education said Monday that over 1 million forms have successfully been submitted and that the FAFSA is now available stems from a law that was supposed to make it easier for lower and middle income Americans to access aid.

15:54
Speaker 2
Right.

15:55
Speaker 1
It was supposed to be more generous to them. Is that still happening currently?

16:01
Speaker 4
It seems like it's a lot more difficult right now, and it's one of those things that seems like it's going to be really hard before it gets easier. So for those families that don't have as much access to financial aid assistance tools and counselors, they're really going to be in a tough spot navigating this entirely new form.

16:20
Speaker 1
But the hope is that families, subsequent families, next year, the years following that, this will be a lot easier to manage.

16:28
Speaker 4
Yeah, this is one of those things where timing is either on your side or it's not. Now I'm just watching to see how many people complete the FAFSA this year, since one of the main goals of the law was that more people would have access to the billions of dollars of federal aid that's available. So I'll be on the lookout for those numbers to see if they're going up or going down.

16:56
Speaker 1
As for monique, she says she just wants the federal government to see how these problems affect families like hers.

17:03
Speaker 2
I feel alone, and like I said, vanessa is our first child. She's the first child in our family that's going to go to college. So we're just really hoping know she can get some good financial aid and go to school where she prefers. This is just all a mess. This is just really all a messy.

17:44
Speaker 1
That's all for today. Friday, January Twelveth. Don't forget that on Sunday, the final episode in our series artificial the Open AI story comes out. You can find it in the journal feed. The journal is a co production of Spotify and the Wall Street Journal. The show is made by Annie Baxter, Kylan Burtz, Katherine Brewer, Maria Byrne, Victoria Dominguez, Pia Gadkari, Rachel Humphries, Ryan Knutson, Matt Kwong, Kate Linebaugh, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alan Rodriguez Espinoza, Heather Rogers, Jonathan Sanders, Pierce Singhy, Jiva Kaverma, Lisa Wang, Catherine Whalen, Tatiana Zamis and me, Jessica Mendoza. Our engineers are Griffin Tanner, Nathan Singapock and Peter Leonard. With help this week from Sam Baer. Our theme music this week is by so Wiley.

18:36
Speaker 1
Additional music this week from Catherine Anderson, Marcus Bagala, Peter Leonard, Bobby Lord, Emma Munger, Griffin Tanner, so Wiley and Blue Dot sessions. Fact checking by Mary Mathis. Thanks for listening. See you on.

18:53
Speaker 2
And Tuesday.