The Department of Education’s online system that millions of Americans use each year to submit applications for student financial aid has critical modernization delays and errors that the agency is no longer addressing, according to a federal watchdog.
The Education Department’s Office of Federal Student Aid (FSA) oversees the Free Application for Federal Student Aid (FAFSA), which around 18 million Americans file each year to receive federal student financial aid, which operates on the FAFSA Processing System (FPS) that processes those applications.
In its Sept. 9 report, the Government Accountability Office (GAO) said that FPS was deployed in 2023 with limited functionality and a tendency to produce recurring errors and other issues impacting students’ ability to receive aid and receive accurate information about their financial aid eligibility.
Yet, a few years later, FSA said it could not account for delays on nine outstanding FPS requirements, offering only high-level release schedules instead. Additionally, in June, it said that new FAFSA-related features would roll out in the coming months, but did not provide details on timelines.
FPS also did not adequately test its IT systems prior to deploying FPS, including not testing with actual end users before the system launch, and reported no future testing plans, GAO said.
“Testing of IT systems is critically important,” said GAO officials. “Although leading practices highlight the importance of thoroughly testing IT systems prior to deployment, FSA did not fully apply these practices … In addition, FSA does not have a plan to guide future FPS user testing efforts.”
“This increases the risk that testing will be incomplete and inconsistently executed,” officials continued, adding that “such testing shortfalls can lead to the discovery of significant system deficiencies when deployment occurs.”
GAO said that FSA had directed its contractor to focus on allowing students and families to submit aid applications while delaying other functionalities when first launching the FPS.
According to the report, FSA’s rocky 2023 FAFSA launch was impacted by contractor silos, clashing tools, and a lack of internal engineering expertise. Separate vendors built key systems that had to integrate with tax and identity modules managed by others, while FSA only began hiring technical staff months later.
“Compounding these issues, according to FSA, was the timeline pressure to develop each component of the system all at once and launch them to the public in a single release,” said GAO. “In addition, FSA stated that it had no additional time in the schedule to remediate any issues.”
Those problems were later made worse by cuts to the Education Department’s workforce earlier this year, directed by executive orders from President Donald Trump. The department cut nearly 50% of its employees, including the certified contracting officer’s representatives at FSA responsible for supporting FPS.
While FSA told GAO that they are working to train replacements, the reductions make it unclear if the agency has the “ability to carry out its mission to manage and oversee student financial assistance programs, such as FAFSA.”
Plans to update FAFSA include a simplified way for students to invite contributors using an email address, real-time identity verification, and real-time processing so that most students can see their aid eligibility immediately.
“FSA officials stated that they could not easily provide information on the status of the nine outstanding contractual requirements because they were not tracking the delivery of FPS in terms of the contractual requirements,” said GAO, warning that without tracking that delivery, FSA risks not having contract terms met by the end of its agreement.
GAO issued seven recommendations to strengthen FSA’s management of the FAFSA Processing System, calling for tighter contract monitoring, validated and documented performance reviews, properly certified staff, specialized training, stronger testing standards, and a plan for future beta testing.
FSA agreed in principle with recommendations on certifications, training, testing, and beta planning, but did not agree nor disagree with recommendations on contract oversight.