New federal student aid application sees 9% decline in submissions, report says

U.S. Sen. Joni Ernst, left, spoke with higher education leaders and students March 25, 2024 at Graceland University in Lamoni. (Photo by Brooklyn Draisey/Iowa Capital Dispatch)

U.S. Sen. Joni Ernst says she’s seeing increased support for a bill she introduced last year to reverse the inclusion of family farms and businesses as assets in the new federal student aid application.

She said the legislation is picking up steam in the wake of a Government Accountability Office report detailing decreases in completions of the Free Application for Federal Student Aid (FAFSA) this year.

The FAFSA was released to the public three months later than usual last year. After its launch, students, families and universities experienced technical issues and other problems that led many universities to push back their financial aid timelines by months.

According to the Government Accountability Office report, FAFSA submissions from first-time applicants decreased by 9% this past cycle, as of late August, and the total number of applicants dropped by 3%.

About 1.6 million students started but did not complete a FAFSA application this past cycle, according to the report. Data from the National College Attainment Network states that Iowa has seen an almost 10% decrease in FAFSA submissions from last year, as of mid-September.

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Lower-income students were impacted the most, according to the report. There was an 11% drop from dependent applicants in the $30,001-$48,000 income range and a 6% decrease from independent applicants with $30,000 or less in income.

In a news release addressing the report, Ernst said the Family Farm and Small Business Exemption Act has received the endorsement of 24 education and agriculture groups. The bill would once again make family farms and businesses exempt from the assets definition in the FAFSA.

Too many families were left out of accessing financial aid this year due to the FAFSA changes, Ernst said in the release. She added that the FAFSA must be fixed for next year.

“There can be no more delay for fixing the Biden-Harris FAFSA fiasco for next year,” Ernst said in the release. “My solution would support farm families trying to responsibly finance their child’s education, instead of forcing them to sell off the farm. ”

Ernst met with higher education representatives, students and their families in March at Graceland University in Lamoni to hear their struggles and concerns about the new FAFSA and its rollout.

Jim Kersten, vice president of government affairs at Iowa Central Community College, said in the release that the college couldn’t make financial aid offers in a timely manner as a result of the FAFSA delays, causing students to not have their results in time to make a decision on where to attend. For families with multiple children in college, Kersten said some contacted the college with concerns that their aid was drastically different than in the past, and that they no longer qualified for certain need-based aid.

“Students decided not to attend Iowa Central Community College this year due to the newly imposed family asset in the Student Aid Index used for financial aid,” Kersten said in the release. “If they have to take out loans for their education, many of our students will go right into the workplace or start working on their family farm instead of pursuing a degree.”

American Farm Bureau Federation Government Affairs Director Dustin Sherer said in the release that the organization appreciates Ernst’s “focus on trying to correct this problem,” which has been exacerbated by continued declines in farm incomes.

“Federal Student Aid and Congress have failed to address key issues — such as how assets related to small business ownership and family farms are counted on the FAFSA — leaving many hard-working Iowans unsure if they’ll have the resources needed to pursue education and training after high school,” said Iowa College Access Network President Rob Miller in the release. “And while much attention has been focused on the new December 2024 FAFSA release date, big concerns remain over FSA’s ability to quickly and correctly process the forms and share accurate data with colleges for packaging.”