Editor’s note: This weekly update from the government relations office at the American Association of Community Colleges (AACC) provides the latest on what’s happening in Washington and how AACC is advancing policies to support community colleges and students. Send questions, feedback and more to: kgimborys@aacc.nche.edu.
- FSA announces temporary FAFSA fix for students with parents or contributors without Social Security numbers
- Department of Education announces new batch of debt forgiveness, hosts second negotiated rulemaking table on student loan relief
FSA announces temporary fix for students with parents or contributors without Social Security numbers
On Tuesday, the Office of Federal Student Aid (FSA) at the Department of Education (ED) announced a temporary workaround to allow students with parents or contributors without a Social Security number (SSN) to complete their Free Application for Federal Student Aid (FAFSA). Since the new 2024-25 FAFSA launched in late December of 2023, there have been a number of glitches and technical challenges, including one that has prevented contributors without an SSN from starting or accessing the FAFSA form. AACC and other members of the higher education community have continually raised this issue as FSA has worked to make technical corrections to the form and user experience over the past two months.
FSA has announced that they expect to have a fix to allow all contributors – with or without an SSN – to have the same consumer experience using the online form by mid-March. However, for students who have a critical state, institutional, or scholarship deadline and who have required contributors without an SSN, students should submit all information on the FAFSA, leaving blank the field asking for a contributor’s SSN and leaving blank the required signature for the contributor. When the forms are processed in March, students will receive an “Action Required” status update requiring them to add the contributor’s signature.
Before this announcement, Department officials and college access groups had encouraged affected students to fill out a paper FAFSA. FSA has indicated that online forms will be processed before paper forms and the agency strongly encourages students to file electronically. If a student chooses to submit an electronic FAFSA using the workaround after submitting a paper FAFSA, the paper form will be “rejected”, as the online form will be processed first. However, if students filed a paper FAFSA to meet a deadline in January or February, they should not use the new electronic workaround in order to not override the paper application filing date.
Department of Education announces new batch of debt forgiveness, hosts second negotiated rulemaking table on student loan relief
On Tuesday, the Department of Education (ED) announced that it will automatically discharge $1.2 billion in student debt for 150,000 borrowers as part of the new borrower-friendly Saving on a Valuable Education (SAVE) income-driven repayment plan. Earlier this year, President Biden announced that the Department would begin student loan forgiveness for SAVE-enrolled borrowers who took out loans of $12,000 or less and have made at least 10 years of monthly payments starting in February, six months ahead of the initial staggered implementation timeline. Community college student borrowers are expected to benefit enormously from this component of the SAVE plan.
Eligible borrowers will begin receiving emails telling them that they have been approved for forgiveness, and they can expect to see balances eliminated on their accounts in the coming days. Borrowers who are otherwise eligible for forgiveness but have not yet enrolled in SAVE will be able to see their loan balances discharged as soon as they enroll. These borrowers will receive direct outreach from the Department in the coming weeks.
With this latest announcement, the Biden-Harris Administration has now cancelled nearly $138 billion in federal student loans held by nearly 3.9 million borrowers, through SAVE, technical fixes to Public Service Loan Forgiveness (PSLF), automatic discharges for borrowers with total or permanent disability, closed school discharges, and borrower defense.
Also this week, the Department is wrapping up a fourth and final negotiated rulemaking session considering additional paths to student loan relief for certain groups of borrowers. ED had convened tables on the issue last fall, and the group had failed to reach consensus on a number of proposals. During this final table, negotiators will consider an item to debt relief for borrowers who experience “financial hardship,” determined by a borrower’s income, repayment status, student loan and consumer debt balances, Pell Grant receipt, degree completion, likelihood to default, and other factors.
ED hopes to issue a proposed rule on student debt relief in May 2024, which leaves a short window to finalize the rule before the November election.