FAFSA delays likely to slow college decisions. 'It's a real mess,' expert says. Here's what to do if your financial aid letter is late

In ordinary years, financial aid award letters are sent around the same time as admission letters so students have several weeks to compare offers ahead of National College Decision Day on May 1, which is the deadline many schools set for admitted students to decide on a college.

For most students and their families, which college they will choose hinges on the amount of financial aid offered and the breakdown between grants, scholarships, work-study opportunities and student loans.

This year, schools are now waiting on that FAFSA information to begin building financial aid packages and to give students and families enough time to weigh their options.

“It is a real mess,” said higher education expert Mark Kantrowitz. “The delay in sending FAFSA data to colleges will cause college financial aid offers to be delayed until at least April, maybe even May.”

Some colleges have already emailed applicants to reassure them that every admitted student will still receive their financial aid package on time — even if that means sending out award letters before the college receives any FAFSA information.

“Making an offer of admission without offering a full financial aid offer really isn’t useful for most families,” said Adam Miller, vice president for admission and financial aid at Whitman College in Walla Walla, Washington.

To do this, Whitman and other colleges would need to leverage the information families provided in their completed CSS Profile. Currently, about 400 schools use the CSS profile in addition to the FAFSA to award nonfederal institutional aid. 

While FAFSA information will ultimately determine whether a student’s financial aid offer includes federal or state grants as opposed to scholarships, Miller said the expected out-of-pocket contribution for families will not be changed. 

“We feel really confident in our financial aid offers, and we’re fortunate to be in a position to stand by those offers regardless of what federal or state funding may come through once we have the FAFSA.”

For now, families should continue to complete their 2024-25 FAFSA forms, advised Rick Castellano, a spokesperson for Sallie Mae. And, in the meantime, tap alternative sources for merit-based aid, he added.

Check with the college, or ask your high school counselor about opportunities. You can also search websites such as Scholarships.com and the College Board.

“The frustration is totally understandable and, frankly, justified,” Castellano said, “but the last thing you want to do is bypass college altogether.”

There’s also a good chance that colleges and universities will extend their decision deadlines to give students and families more time to assess their financial aid packages.

“Given schools will not begin to receive processed FAFSA data until sometime in March, I would not be surprised if the universal reply date is extended to June 1 or later,” said Kalman Chany, a financial aid consultant and author of The Princeton Review’s “Paying for College.”

Several national organizations, including the American association of community colleges and the American association of state colleges and universities, also issued a statement encouraging schools to give students and families more flexibility as they consider their offers of admission and financial aid. 

“During the pandemic, many institutions extended their enrollment, scholarship, and financial aid deadlines beyond the traditional May 1 date, and we urge institutions to make similar accommodations this year,” the groups said in a collective statement. “We all want students and families to have the time they need to consider their financial options before making enrollment decisions.”

Don’t miss these stories from CNBC PRO:

Subscribe to CNBC on YouTube.