Issues with federal student aid application process led to fewer low-income recipients

The number of federal student financial aid forms filed by graduating high school seniors is down compared to last year, after glitches and technical errors plagued the process. (S. Dominick/Getty Images)

Approximately 1 million fewer students are receiving federal aid for low income students in 2024 than previously projected due to issues with the rollout of a new financial aid application, a Congressional Budget Office analysis found.

The bungled rollout of the new Free Application for Federal Student Aid (FAFSA) has led to a host of issues for higher education, including admissions disruptions. The Congressional Budget Office’s analyses of the Pell Grant , which provides federal student aid to low-income students, found that an anticipated budget shortfall for the program won’t happen in fiscal year 2025 — because fewer students completed their FAFSA.

The Congressional Budget Office expects FAFSA applications to be down 10% this year relative to 2023 before rebounding to last year’s levels in 2025, Congressional Budget Office spokesperson Deborah Kilroe said in a statement. Her agency finalized its estimate in May when applications were down approximately 30% to 40% relative to the prior year, as a result of “complications in the implementation of FAFSA simplification,” she said.

The CBO analysis found that slightly less than 6 million students will receive a Pell Grant in 2024, about 490,000 short of its forecast for 2024 and about 1 million fewer than the Biden administration predicted.

Data from the National Center for Education Statistics show that 72% of Black undergraduates received Pell Grants, compared with 36% of Asian students and 34% of white students, indicating the loss of Pell could have inordinate impacts on minority students.

Nationally, about 34% of undergraduate students receive Pell Grants .

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