Is the FAFSA Poised for Another Fiasco?

Last year the financial aid world was thrown into chaos after a newly overhauled Free Application for Federal Student Aid launched with glaring technical errors and user issues. Now, government officials and financial aid professionals say the Trump administration’s mass layoffs and spending cuts at the Education Department are threatening to cause a repeat.

The administration has said it is committed to maintaining the federal aid form, one of the department’s congressionally mandated responsibilities.

Acting under secretary of education James Bergeron assured higher education officials in a March 14 letter that “no employees working on core functions of the Free Application for Federal Student Aid were impacted by the [reduction in force].” So far, despite laying off half of the department’s workforce, they have avoided cuts to the team that works directly on the form, headed by a newly created FAFSA program executive director.

But remaining Office of Federal Student Aid staff, college-access advocates and financial aid officers say that deep cuts at FSA, which oversees the FAFSA, could undermine its capacity to fix technical issues as they arise, field questions from families still wary from last year’s botched rollout and manage the third-party contractors responsible for much of the form’s functionality—all issues that plagued the department last cycle.

Kim Cook, director of the National College Attainment Network, said Bergeron’s message has been “encouraging” for college-access advocates and financial aid professionals. But she’s not convinced that the larger department cuts will leave the form unscathed.

“It’s hard to wrap your mind around how you continue to deliver the same quality with your staff so reduced,” she said. “They’ve made cuts to things that are important to us, like the [FAFSA help] call center or training for [financial aid] practitioners. Like, who’s taking care of the software vendors?”

One current FSA staffer, who spoke on the condition of anonymity, said that while the FAFSA team itself remained intact, the cuts were rattling nerves about the team’s ability to manage the public-facing form and the stakeholders who rely on federal guidance to navigate it.

Could the cuts jeopardize the form’s functionality as the application season continues into spring?

“Certainly could,” they said. “It’s hard to know at this point.”

Karen McCarthy, vice president of public policy and federal relations for the National Association of Student Financial Aid Administrators, said financial aid officers at colleges and universities are also stuck in this “wait and see” mentality. After weathering back-to-back storms—the COVID pandemic and last year’s bungled FAFSA rollout—they were hoping to catch their breath. That seems unlikely now.

“In our community, people are saying this is the next crisis period,” she said. “There is concern this will be significantly disruptive for financial aid, with a lot of unknowns and changing information that are hard to adapt to.”

Technical Support Diminished

Bryce McKibben, senior director of policy and advocacy at Temple University’s Hope Center for Student Basic Needs, said the Biden administration laid a solid foundation for an improved form this cycle. But that doesn’t mean it’s insulated from technical troubles.

“If glitches and problems do arise, I think they may have a lot of trouble addressing them,” he said. “It’s a slow-rolling disaster.”

So far, the application has remained functional aside from one worrying incident on March 13, two days after the RIF, when the FAFSA website crashed, preventing students and families from applying for aid. A few days later, 50 previously laid-off employees at the FSA had their RIF notices rescinded, Inside Higher Ed reported. All of them worked in the tech office.

A spokesperson for the department said the outage was caused by a back-end issue with the form’s identity verification process and was resolved “in a matter of hours” by FSA.

“This was unrelated to the RIF as no FSA staff are responsible for operations of these systems, they are managed by vendors,” the spokesperson wrote in an email. The anonymous FSA staffer also said the crash was unrelated to the RIF.

McCarthy said the outage seemed to belie a larger issue post-RIF: that the department no longer had the capacity to fix what should have been a small glitch before it affected hundreds or thousands of families.

“Our concern is we might see more of those kinds of things in the future,” McCarthy said. “The FAFSA team people aren’t the ones maintaining the website … they may not have the support to do what they need to.”

Sarah Sattelmeyer, a project director at the left-leaning think tank New America, worked for FSA from February of last year until just before Trump’s inauguration. She said that during her time working on the FAFSA, she learned just how important those support staff are to the smooth operation of the form.

“Anything that’s a statutorily mandated function—it’s one thing to maintain it, but it’s equally important to have all the services that wrap around it,” she said. “The cuts mean those will be much more bare-bones for families and colleges.”

Contractor Codependence

The Federal Student Aid office relies heavily on contractors for its work with the FAFSA, from software upkeep and records processing to fielding questions from parents and counselors.

One contractor, General Dynamics Information Technology, was largely responsible for the software overhaul that led to last year’s technical issues with the form. Education Department insiders who spoke with Inside Higher Ed in January about the 2023–24 federal aid fiasco, including former FAFSA czar Jeremy Singer and under secretary of education James Kvaal, said lack of contractor oversight contributed greatly to the rollout issues.

The FSA had just hired in-house engineers to help manage vendors last year. But in March, the agency’s entire vendor performance division—the team that manages third-party contractors, including those that work on the FAFSA—was eliminated in the RIF, according to an organizational chart obtained by Inside Higher Ed.

The Department of Government Efficiency, headed by the unelected billionaire bureaucrat Elon Musk, has also said it wants to cut the Education Department’s contract with Accenture, which helps run crucial FAFSA support services like its call centers, by 80 percent. A department spokesperson declined to respond to a question about which FAFSA-related contracts were under review or if any had been cut.

McKibben said the combined belt-tightening and lack of oversight staff will make the FAFSA more dependent on vendors while simultaneously weakening accountability.

“You’re only putting yourself at the mercy of unreliable contractors,” he said. “If the student aid system begins to creak and crumble, the contractors themselves could start to push back, and we would certainly see that on the technical end.”

The anonymous FSA staffer said the vendor team’s elimination, while upsetting “on a human level,” could actually streamline technical work on the FAFSA.

“The work impact is that there are fewer steps and stuff moves faster,” they said.

But McCarthy said the vendor performance team did more than ensure contractors were meeting deadlines: They helped explain what bureaucrats and policymakers expected from the contractors and, in turn, what was realistic on the contractors’ end.

“They’re making sure everyone knows what to do: with compliance, with expectations and training and making sure everyone is on the same page,” McCarthy said. “It’s not just cracking the whip. It’s support, and the vendors need that.”

McKibben fears that the worst-case scenario could mean a downturn in low-income enrollment even larger than experts predicted last spring.

“They’re playing with fire. And I don’t think any of this is hypothetical; we’re already seeing big challenges,” McKibben said. “The end result of all this is lower enrollment at a time when we really need more.”