FAFSA Fiasco Pushes States to Mandate Universal Completion

This year’s rollout of the Free Application for Federal Student Aid was, by almost all accounts, a fiasco. What was supposed to be a simpler form made the process more complicated for many. The new form was riddled with technical glitches and calculation errors, and delays left students and colleges in limbo, waiting for the need-based scholarship awards to come through. Experts warned that steep declines in college going could ensue.

But out of the overall mess has come an unexpected victory for college access advocates: increased momentum for state legislation on FAFSA completion.

Such bills, often known as universal FAFSA policies, require students to complete the federal aid form in order to graduate from high school. The National College Attainment Network (NCAN) and local nonprofits across the country have been pushing state lawmakers to mandate FAFSA completion for more than a decade, on the theory that it encourages more students to enroll and attain a postsecondary credential.

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As of this spring, 15 states had passed some kind of universal FAFSA policy; eight were in effect this past academic year. Recent NCAN data, combined with case studies from the State Higher Education Executive Officers Association (SHEEO), show that many of those states had the highest completion rates—and lowest year-over-year dips—despite this year’s bungled rollout.

Illinois and Texas, two of the earliest states to implement such a requirement, ranked third and fifth for completion rates as of June 21, at 54.7 percent and 53.1 percent, respectively. Students who did not complete the FAFSA likely either intentionally opted out with a parental signature or were automatically opted out under special provisions established for this year’s snafu. Indiana, which introduced a FAFSA completion requirement this past academic year, had the lowest percentage change; the share of high school graduates who completed the FAFSA dropped by just 1.1 percent from last year.

In a year when some have worried that FAFSA completion initiatives would lose steam, experts say universal FAFSA policies are actually more likely to gain support.

“I don’t think states would look at this and say things didn’t go well because of universal FAFSA. I think it would tend to be the opposite,” said Rachel Burns, a senior policy analyst at SHEEO and co-author of the case study report. “[States] are going to say, ‘I’m so glad we have universal FAFSA, because now we have the resources, staff capacity, state buy-in and everything to make sure that they could help students through all the challenges.’ For the foreseeable future, this is still going to be something that states are very interested in.”

A Shield in the Storm

Jim Purcell, executive director of the Alabama Commission on Higher Education, said that amid this year’s “horrific rollout,” his state’s long-running universal FAFSA program—and the culture of trust and collaboration it’s created—helped keep completion numbers relatively high. The state’s FAFSA requirement, which has been in place since the 2021–22 academic year, requires seniors graduating from a public high school to fill out the FAFSA in order to receive their diploma. Students who opt out by having their parents sign a waiver can still graduate.

Though Alabama’s FAFSA completion rate dropped 19.8 percentage points from last year, the state still ranked 16th in the country, with an above-average rate of 45.8 percent.

“The institutions that are seeing lower numbers are understanding how important an initiative like this [is],” Purcell said. “During the calamities of it, I’ve been out talking to many states. I’ve spoken at conferences about our efforts in Alabama, and there are some states that are interested in going that direction.”

With graduations mostly over and counselors on summer vacation, it will be difficult for many states to boost FAFSA completion rates higher than they were on the last day of high school. But Purcell noted that Alabama’s universal FAFSA program—and the staffing and resources that come with it—allow the commission to continue outreach right up until the first day of college classes.

“We need to make sure that there’s someone helping these students complete a FAFSA,” he said. “It doesn’t happen just in a cavalier way; there is an effort that is required to make sure your numbers are up.”

In Indiana, Greg Harrell, director of legislation and program implementation for the state Commission for Higher Education, credited the new universal FAFSA program with minimizing the hit to the Hoosier state’s completion rate, which declined by just over one percentage point, to 44.7 percent.

“Despite some of the unprecedented challenges that we encountered … this policy was really a key lever here in Indiana,” he said. “We’re really excited about what our results have been for year one of this policy shift and really look forward to its continued impact across the state.”

Harrell said it took a while to gather support for the bill, but one of the components that helped get it across the finish line was the built-in off-ramp for students.

In Indiana, and nearly all states where a universal FAFSA policy is in place, students have ample opportunity to opt out. They can either get written permission from their parents or they are automatically dropped after a certain date or a set number of contact attempts from a counselor. That means that universal FAFSA policies rarely, if ever, prevent a student from getting a high school diploma. Instead of framing it as a graduation requirement, Harrell said, think of it as a default option.

But Is It Strong Enough to Last?

Officials in some states that are just rolling out a completion requirement seem less enthusiastic about its prospects.

Ritchie Morrow, financial aid officer of the Nebraska Coordinating Commission for Postsecondary Education, said his agency, along with the local nonprofit EducationQuest, has been trying to get a FAFSA requirement in place for years. A bill was finally passed a year ago and will go into effect this fall for the graduating class of 2025.

Still, he worries that the program could lose support if the platform experiences more delays and technical glitches this year.

“We are not going to make any changes,” he said. “Nobody in policy has reached out to us on this. But we have heard from some of the high school folks, particularly the counselors, asking, ‘What if the 2025–26 FAFSA is delayed and there are problems with it like there were with the 2024–25?’”

In a conservative state where lawmakers tend to avoid any program that adds a layer of government bureaucracy, he said, the policy could come under attack if completion rates don’t increase as much as lobbyists have suggested they would.

“Our Legislature will be in session in the springtime, and if this is a graduation requirement and there are problems with getting FAFSA filed, there’s going to be a lot of phone calls to our legislators,” Morrow added.

He has cause for concern. In West Virginia, which traditionally required students to complete FAFSA to access state aid, Republican governor Jim Justice declared a state of emergency amid the chaos of the new FAFSA rollout and suspended the policy for the year.

But Katherine Meyer, a fellow for the Brown Center on Education Policy at the Brookings Institute, said she hopes temporary rollbacks aren’t necessarily a sign of doom for FAFSA completion requirements long term.

“It was absolutely the right choice for states like West Virginia to be lenient with FAFSA graduation requirements this year—it’s not students’ fault that the FAFSA wasn’t functional for most of their senior year, and they certainly shouldn’t be penalized for not completing the form,” she wrote in an email. “However, while essential this year, states shouldn’t permanently drop FAFSA graduation requirements or stop using the FAFSA to allocate state aid. These are best practices that in a typical year increase FAFSA filing.”

Louisiana, which was the first state to implement a universal FAFSA policy, in 2018, also raised concerns by permanently rolling back its requirement legislation this spring. State lawmakers said it was not a direct response to this year’s FAFSA fiasco; rather, the program had become burdensome and promoted college-going over more vocational paths, they said. Meyer noted that although the reversal caused her to take a “slight pause,” she generally trusts that historically bipartisan support for such bills will continue.

In the end, Meyer believes this year’s circumstances only underscore why states should expand FAFSA mandates and supports rather than roll them back.

“Ultimately I think FAFSA completion mandates get passed because states realize it ensures students receive the federal financial aid they’re eligible for, and often that saves the state money in their scholarship and grant programs,” she said. “In that sense, I expect we’ll see states continue to adopt them in the years to come.”