Navigating the New FAFSA Landscape
trategic Recommendations for Higher Education Enrollment Management
As colleges and universities grapple with the complexities of the recently introduced FAFSA updates, enrollment management leaders face unprecedented challenges. The delayed release of the new FAFSA has led to confusion and stress among students and their families, impacting the traditional timeline for financial aid awarding and aid optimization at most institutions. Recently, HAI Analytics polled higher education enrollment management leaders, revealing concerns about the potential negative impact of FAFSA filing delays, which opened much later than planned on December 31st.
[Make sure to read the editor's note at the end of this post about the Department of ED's announcement that institutions will not receive student FAFSA data until mid-March.]
Among those who participated in our poll, 53% expect a negative impact, or a decrease, in the number of FAFSA-filers in the 2024 admission cycle compared with 2023. About 9% feel optimistic that filer rates will increase and another 9% believe that there will be no change. Finally, 29% of participants are unsure but committed to closely following the trends. Through this poll, we found that the majority of respondents (62%) believe that there will be a measurable difference, either positive or negative, in the number of FAFSA submissions as a result of the new FAFSA rollout.
In this blog post, we delve into the key challenges posed by the new FAFSA rollout and provide strategic recommendations for institutions to navigate these challenges effectively. Whether faced with a decrease in FAFSA completion rates, an increase, or no change at all, our insights and recommendations aim to equip enrollment management professionals with the tools needed to adapt to the evolving landscape and ensure the continued success of their institutions.
What to do if the delayed New FAFSA negatively impacts filing rates
Understand Where the Decreases Have Occurred: In scenarios where FAFSA filing experiences a negative impact to filing rates, our recommendations focus on assessing volume changes in specific need bands. Because of the updates to the needs analysis and the shift from Expected Family Contribution (EFC) to Student Aid Index (SAI), benchmarking need through the new FAFSA against the old will not be a true apples-to-apples comparison. We recommend scoring historical filer pools with the NASFAA SAI modeling tool and comparing those results to the new distributions. This will eliminate differences in the distribution based solely on the changes in the needs analysis and provide greater clarity on behavior differences among groups.
Leverage Third-Party Geodemographic Data: We also recommend utilizing third-party geodemographic data to understand the types of students who are not filing a FAFSA, and whether the pool is comparable to previous cycles. Neighborhood and household demographics can differentiate demographic shifts from financial barriers, making institutions better positioned to develop targeted support strategies.
Predictive Models for Student Yield: Predictive models also play a crucial role in forecasting student yield, enabling institutions to make informed adjustments to aid strategies and achieve enrollment targets despite reduced FAFSA filers.
What to do if the delayed New FAFSA has a positive impact on filing rates
Analyze Global Increases or SAI/Need Bands: For institutions experiencing an increase in FAFSA filing volume, our strategic recommendations guide enrollment management leaders in understanding where this growth is occurring. Through a nuanced analysis of global increases or specific SAI/need bands, institutions can leverage predictive yield models to forecast enrollment and discount rates accurately.
Use Predictive Models to Forecast Impact on Spending: More students completing the FAFSA is good news, but it also may result in an increase in institutional aid offers beyond the planned awarding strategy. Utilizing predictive models will forecast whether an increase in offer expenditures will trickle down to an increase in discount among the future enrolling pool, and to what extent. This approach ensures a comprehensive understanding of the implications of institutional need-based aid and facilitates effective decision-making beyond planned admit offer budgets.
What to do if the delayed New FAFSA as no impact on filing rates
Analyze Nuanced Differences Across Awarding Bands: Even if FAFSA filer volume remains consistent, it’s important to look for nuanced differences across the pool by awarding band.
Remove Timing as a Factor in Predictive Models: We advocate for adjustments in predictive models and awarding strategies to accommodate the altered FAFSA release schedule, emphasizing the importance of removing timing as a condition in predictive yield models for improved accuracy.
Be Aware of Potential Impact on Future Cycles: Institutions must also carefully consider the condensed filing window's implications. Our recommendations focus on understanding the context for future yield seasons and avoiding misleading comparisons with the 2024 cycle.
Amidst the uncertainties introduced by the new FAFSA, strategic enrollment management requires adaptability and a data-driven approach. In all cases, using predictive models at the top of the funnel (i.e., inquiry-to-applicant conversion models) will help to determine if there have been shifts in the pool that may trickle down to enrollment. In a similar vein, changes in the incoming pool can affect first-to-second year retention, so it is important to anticipate what those impacts may be in order to respond quickly and stave off higher-than-normal drop outs. Having predictive models for every stage of the student lifecycle is the best way to prepare your institution for external changes that are beyond your control.
Our recommendations provide actionable insights for institutions to navigate the complexities of the new FAFSA landscape, ensuring they are well-prepared for any outcome. By staying informed, leveraging predictive modeling, and making data-driven decisions, colleges and universities can thrive in the ever-evolving higher education landscape.
Edited to add: The day after publishing this post, The Department of Education announced that institutions will not receive ISIR FAFSA data until the “first half of March”. This announcement came just one day before the Department’s original, and already significantly delayed, timeline to release student FAFSA data to schools by the end of January. This further condenses the already narrow window for institutions to expeditiously package financial aid and for students to carefully consider their college choices for fall enrollment.
The FAFSA rollout delays have been cause of great concern for those in the field, and we commit to staying informed about how this will evolve over the remainder of the cycle. Stay tuned for our next post, where we will share practical tips for what you can do now in preparation for a mid-March data release and how to mitigate against any negative impacts of these further delays. Also be sure to sign up for our newsletter (below), where we share breaking news and strategies institutions can implement to ensure success!