Students from low-income family groups who want to continue their education are the worst hit due to the ongoing COVID-19 situation. This has led to job loss and has affected the financial status of the families, while financial aid applications are still dependent on the previous year’s (pre-pandemic) income data. There will a gap in this year’s numbers compared to last year’s income data for families that are looking for student financial aid support. While this represents one of the challenges that students are grappling with, the journey gets tougher post the SAR (Student Aid application) form submission by students through the FAFSA (Free Application for Federal Student Aid) in the US. The Student Aid Package goes through multiple revisions due to changes in student details, missing information, change in the program, and other factors affecting the Student Loan eligibility criteria. This rework and multiple revisions leads to higher turnaround time, in turn resulting in a backlog of SAR even after the term starts, which leads to uncertainty of aid approval and directly impacts student experience.
Some of the complexities and challenges impacting the lead-time of SAR include but are not limited to:
- Changes in student information that goes onto the FAFSA form – there are close to 250 different line items updated by students through FAFSA and any change in this information at the student’s end leads to new version of the Student Aid Request form being created. This in turn leads to a rework of all activities until final approval.
- Lack of assistance on FAFSA Form related queries/FAQs - if not addressed timely could lead to misinterpretation and incorrect inputs updated by students
- Needs analysis and Verification of inputs from student – Time-consuming process and may lead to manual errors
- Award Packaging- Complex calculations and comparison of standard and non-standard datasets
- Multiple revisions and rework- makes it difficult to track the SAR request at every stage and manage the dependencies in a timely manner, thus affecting the overall lead-time for SAR closure before the term begins.
These challenges drive the need to rethink and redesign the financial aid support system, accelerate SAR closures before the term starts, and enhance student experience through the adoption of the four pillars namely Simplification, Standardization, Automation, and Immersive Experience to deliver the right essential outcomes.
To navigate the disruption, the industry needs to:
- Improve FAQs to assist with FAFSA form inputs
- Eliminate manual review and verification of FAFSA inputs against verification Database
- Automate complex calculations to derive Financial aid package
- Improve effective end-to-end case management and follow-up process
- Emphasize on reporting, analytics, and insights to improve quality
To accelerate SAR closures, improve stakeholder/student experience, and increase efficiency, the industry should leverage automation, effective case-management tools and analytics, along with digital interventions like Natural Language Processing, Artificial Intelligence, Reasoning and Machine Learning to enable data-driven decisions.
AI chatbots, self-service enablement, effective end-to-end case management and data extraction tools, and automation along with Analytics will help accelerate SAR closures, improve student experience, and reduce cost.
Below is a pictorial representation of a high-level financial aid process and an approach to bring the right interventions to redesign and enhance the process.