States of Opportunity: Building Meaningful Connections Between the FAFSA and State Financial Aid

Photo by Allison Shelley/Complete College Photo Library. 

Imagine a high school senior in West Virginia, the first in her family to go to college, sitting at her computer trying to file the FAFSA on her own. She continuously gets errors, and weeks later, she still can’t get the form to process. She has no one to ask questions to and starts to wonder if she will receive the financial aid she needs to enroll in the fall.

She isn’t alone. Last year, FAFSA delays and errors meant that some states couldn’t get the data they needed to award aid on time. In West Virginia, where our hypothetical student resides, FAFSA problems even prompted the governor to declare a state of emergency.

This student’s experience highlights a deeper challenge: many states depend on federal systems to award aid, and when those systems face challenges, students feel the impact.

Federal-State Partnership

For decades, federal and state student financial aid programs have worked hand in hand. States have relied on the FAFSA as their main application tool, streamlining the process for students and keeping the focus on need-based aid . Over 200 state aid programs require information from the FAFSA, according to the 2022 – 2023 National Association of State Student Grant and Aid Programs (NASSGAP) Annual Survey. But with recent staffing cuts and organizational changes at Federal Student Aid (FSA), the future of this alignment feels less certain. This uncertainty raises big questions: What do states need from FSA and the FAFSA to run their state-funded aid programs? And what steps are state financial aid leaders taking to ensure predictability and consistency in state aid processing?

What’s at Stake?

States administer over $12 billion in financial aid annually and serve more than 4.5 million students. Suppose the timely availability of the FAFSA becomes unreliable. In that case, states face a tough choice: building their own processes at the risk of adding a burden on students or tying themselves to a system they can’t fully count on.

Without thoughtful action, we risk state-funded aid sliding backward, away from aid based on federally provided income levels, and instead relying on easily accessible state measures, like GPA and test scores.

A New Project to Build Resilience

Rather than waiting for the next crisis, states need proactive strategies. That’s why NCHEMS is launching States of Opportunity: Supporting State Financial Aid Policy Development in Dynamic Times, a new project supported by Strada Education Foundation. The goal of this project is to help states anticipate and adapt to federal uncertainty while keeping student access to aid at the center.

• Phase One: We’ll start by identifying the FAFSA components states rely on most. This will give the FSA a clearer picture of which federal processes states rely on the most and set the stage for brainstorming with state financial aid leaders.
• Phase Two: We’ll convene state financial aid leaders, including members of the National Association of State Student Grant and Aid Programs (NASSGAP), to share strategies, explore innovative ideas, and brainstorm ways to maintain predictable, accessible, and responsive state programs, even as federal systems evolve.

Looking Ahead

In this moment of federal uncertainty, states have a rare opportunity to strengthen their aid systems, protect affordability, and make sure that students aren’t paying the price of policy instability. At its core, this project is about ensuring that students—like the high school senior in West Virginia—don’t lose out on the opportunity to pursue higher education simply because of federal uncertainty.

Follow NCHEMS on LinkedIn or Bluesky to stay updated on this project.