S&P Global Ratings: Condensed FAFSA Timeline Not Affecting Colleges Equally

As probably no one reading this needs to be reminded, the U.S. Congress-mandated streamlining of the Free Application for Federal Student Aid (FAFSA) by the Education Department has not gone smoothly. While the traditionally burdensome form now has many less questions and integrates IRS data directly, the modernization in the short term has been messy, leading to a delayed FAFSA timeline and prompting the ED to offer increased support and flexibility to colleges. This has included deploying federal employees to aid lower-resourced institutions and easing verification requirements.

Nevertheless, according to a report by S&P Global Ratings, there are disparities in how colleges are handling the changes, with minority-serving and low-income student-focused institutions facing more significant challenges in accurately disbursing aid amidst accelerated timelines. The credit agency said this potentially will lead to overspending and delayed decisions that can affect fiscal planning for 2025.

With enrollment competitiveness at its peak, some colleges may prioritize issuing financial offers before receiving FAFSA information to gain an edge, risking overspending.

“It could be that some schools with greater resources extend financial offers before receiving the FAFSA information, as a competitive edge for fall matriculation,” the report said.

Consequently, delayed student decisions could impact deposit timelines, posing challenges for colleges to adjust operating budgets promptly. Notably, some institutions have already extended financial aid deadlines in response to FAFSA delays, a trend S&P predicts will continue to unfold across the higher education landscape.

What does it mean?

The importance of personalized, relevant and impactful communication is more critical now than ever for universities recruiting students in the face of condensed FAFSA. The window for universities to stand out is even smaller, and generic messaging might get lost in the flood of information students receive, causing them to overlook your institution.

Personalized communication grabs attention and makes your institution feel more approachable.

The FAFSA upheaval can create confusion and anxiety for students and their families. Tailored communication that directly addresses their concerns is vital. Highlight relevant financial aid options. Emphasize scholarships, grants and other assistance programs. And make sure it’s relevant to the student’s academic profile and potential needs.

Also, be sure to provide clear deadlines and instructions and simplify your process by providing specific steps and clear guidance. Personalized communication fosters a sense of connection and shows genuine interest in each student’s future.

Build trust and make your prospective students feel valued during the home stretch of this chaotic recruitment cycle!

By Christopher Harris, Ed.D., Senior Enrollment Strategist, Capture Higher Ed