Troubleshooting what went wrong with FAFSA – and how to fix it

Digital modernization is harder than it sounds; here’s what we believe went wrong and how we think this could be prevented in the future

by Intelliworx®

Note: Our intent here isn’t to criticize the government or another solution provider trying to help the government, but to contribute to an important conversation about what happened. Just like an after-action review (AAR) in the military, nobody can solve a problem if we’re all too afraid to talk about the realities in public. To that end, we’ve done our best to describe suggestions in a positive fashion.

Intelliworx has helped some 30 federal agencies transform hundreds of government forms. We don’t just turn paper forms into digital copies like PDFs, we transform the whole business process making it better and easier for everyone involved.

We have a special interest in education too. This is because we’ve helped the Department of Veterans Affairs (VA) digitize the application process and manage a $100 million scholarship and loan repayment program for healthcare providers over the last five years.

The program is crucial for our nation’s veterans. It helps to attract and bring new healthcare providers into the VA system. This ensures future healthcare for those who put themselves in harm’s way for our country.

So, when the crisis around the new FAFSA (Free Applications for Federal Student Aid) broke we paid close attention. Below are some of our observations of the crisis – based on public reporting – and our thoughts on preventing this from happening again.

Public observations over the FAFSA crisis

Here are some of the key events we’ve seen publicly – with links to the underlying source.

2021-2022. Several recent bills were signed into law that required the FAFSA form to be modernized.
2022: The Department of Education awarded a $121.8 million contract to an outside solution provider for modernization. The new form promised to be “simplified, redesigned, and streamlined” and “faster and easier to fill out, with most students and families completing it in less than 15 minutes.”
2022: Our understanding based on reading some of the award documentation the new system would be carved out of a commercial-off-the-self (COTS) CRM system along with some custom work being done by the agency:

“…involves a mailbox system the department developed to share the FAFSA information with colleges. Among colleges that haven’t set theirs up, most described technical problems. They struggled to connect and update the software and get customer service from the department.”

October 2023: When the new form was to be rolled out, it didn’t include some inflationary financial adjustments that were required by law; awards can vary by 20% – over or under the rightful amount; instead of being rolled out in October the application process did not open until two months later.
January 2024: The delay triggered a series of problems. The government postpones sending FAFSA data to schools until March 2024. This leaves the universities and students who need financial aid awards to plan their higher education for the following fall, in limbo.
April 2024: The delays persist. Short-term fixes are being implemented that may have long-term effects.
Some colleges are being told to process existing FAFSA forms despite the erroneous calculations if the calculation benefits the student; schools worried they’ll be audited and punished later and it’s “a disservice to students if you give them the illusion that they’re eligible for more aid in one year, when really, they’re not.”

What’s the impact?

Less than half of the 17 million FAFSA forms completed on average every year are ready (at the time of this writing).

U.S. News & World Report summed it up aptly:

“Delays in opening the FAFSA cause a domino effect: delays in millions of students and parents filing it, delays in processing it and sending students’ financial information to colleges, delays in colleges creating financial award packages and delays in students receiving award letters and deciding where or even if they will attend college.”

Further, there’s a lot of concern that low-income and underserved communities will be adversely affected.

What went wrong?

It’s easy to play armchair analyst when things go wrong – and it’s fair to acknowledge openly this post is doing just that.

Yet this is also an area in which we have a lot of expertise, and this is a public issue because the taxpayer is footing the bill. Indeed, the total monetary impact of fixing all this will most likely exceed the cost of the contract.

So, what went wrong? We think there are three key issues:

First, you’ve got to look at the bigger picture. Forms are merely the output of a business process. If you don’t first map the business process, you’ll miss important details that will cost more later – like adjusting financial aid awards for inflation.

Second, for a contract this size, best practice requires purpose-built software. It’s just asking for trouble to do otherwise.

Third is the timing. This is a massive project, and you need plenty of time to test and be assured the product will perform as planned.

What’s the solution?

From our point of view, it starts at the very beginning. Trying to patch up a system that had issues before it was even rolled out is just asking for residual problems that could persist for years.

One thing is certain: nobody wants this to happen again next year. As such, we have three recommendations:

1. Map the business process

Mapping out the business process will give the architect a complete picture of what needs to be modernized. Further, it will transform the team from thinking about modernizing a form – to thinking about how to best collect the data that enables the FAFSA application process.

This type of thinking is how government leaders can get the whole team – civil servants and government contractors – aligned.

2. Use purpose-build tools

Some technologies exist today that were purpose-built for managing this exact process. These tools are proven, FEDRAMP-authorized, and have reference-able and tenured government customers.

Such tools already have integrations ready to go and secure processes for sharing data with third parties – like students and educational institutions. There’s no need to build an “inbox” that requires colleges and universities to have technical help to use.

We would love it to be our product, but it doesn’t have to be ours. However, it shouldn’t be COTS software that was designed for something else being repurposed for a different problem.

3. Experience helps avoid known pitfalls

We applaud the government’s effort to improve the customer experience (CX) for citizens – and the digital experience (DX) for citizens and civil servants. Yet some of these projects have dependencies that can break if you haven’t done this before. It helps to have some experienced help on the team that has done this not just once, but 30 times and with proven results.

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Intelliworx provides purpose-built software such as workflow, application management, financial disclosure, and automated digital forms to more than 30 federal government agencies. The company is a certified veteran-owned small business and is FedRAMP-authorized.