The deadline to complete the Free Application for Federal Student Aid (FAFSA) and California Dream Act Application (CADAA) for UC and CSU came and went on May 2, and completion rates by California high school graduates fell 19%—or by almost 60,000 students—compared to this time in 2023. Given that FAFSA completion raises the likelihood that students will enroll in college by 84%, the lower rate may impact college access and affordability in the coming school year. Enrollment may drop among students whose school choice is guided by financial aid, a group that includes low-income students and students of color.
The implementation of the FAFSA Simplification Act (2020) is driving the decline in completion rates. The new FAFSA, often called “Better FAFSA,” contains 36 questions instead of the earlier form’s 108. But the new form was released three months later than planned—possibly due to insufficient software systems and administrative staff. This delay cut by half the usual time to complete the form.
In California, the legislature extended the deadline for completion from March 2 to May 2, but timing issues were only one part of the problem—and perhaps not the most important part. In fact, the main challenge to FAFSA completion appears to be difficulties with progressing through the form itself. The form contains distinct instances when students may be prevented from completing it, such as when they belong to a mixed-status family (i.e., one financial contributor is not documented while another has a Social Security number (SSN), or neither contributor has an SSN. The form cannot link the necessary tax data or generate a Federal Student Aid identification number without an SSN. Other issues include students who have a parent living in another country or students who live with a grandparent. The large population in California that falls within these groups have been largely unable to submit the form.
Colleges and universities require FAFSA information to design award packages and manage admissions and enrollment. This year, colleges may not have been able to process families’ financial data until shortly before the deadline for students to commit to a school, which was May 15—an extension of the traditional May 1 deadline. Some students then may have chosen a college without knowing their financial aid package. Other students may have shifted from four-year colleges to two-year colleges due to the September 2 FAFSA deadline for California community colleges. Some students may have decided not to attend college at all.
Financial aid influences college-going decisions for many students. In 2024, the lower rate of FAFSA applications and later processing of financial data could exacerbate gaps in college access, especially for students who depend most on financial aid, such as low-income students and students of color. Furthermore, financial aid varies campus by campus, serving as an additional factor for students to consider along with local cost of living and the type of institution they may want to attend. As the school year ends, colleges and high schools will need to work together to help students determine their next steps for the future.
The state should continue to communicate with its colleges and universities to identify policies that could mitigate the immediate impact of changes to the FAFSA. Meanwhile, stay tuned for upcoming research from PPIC on this topic, as we investigate the implications of FAFSA policies and monitor trends in FAFSA completion.
