2025 FAFSA Delays Impact Enrollment: A Prep Guide

A critical factor that can significantly affect student enrollment is the availability and accessibility of financial aid. With the upcoming delay in releasing the 2025-2026 Free Application for Federal Student Aid (FAFSA) form, college and university leaders must brace for potential disruptions to their enrollment cycles. This delay could have profound implications for institutions relying on timely FAFSA data to guide admissions and financial aid decisions.

To navigate these challenges, educational institutions can benefit from a proactive approach, modeling the potential impact on their 2025 enrollment. Below, we discuss key steps to help college and university leaders build a robust strategy to address these uncertainties.

Understanding the 2025-2026 FAFSA Delay

Before diving into the modeling process, it's essential to understand the context. The FAFSA form, which plays a pivotal role in determining students' eligibility for financial aid, will be released approximately two months later than usual for the 2025-2026 academic year. The delay is primarily due to ongoing efforts to simplify the application process and integrate the changes mandated by the FAFSA Simplification Act.

This shift means prospective students and their families may have to wait longer to receive critical financial aid information, potentially leading to delayed enrollment decisions or even reconsidering about attending college altogether. For institutions, this creates a ripple effect, impacting enrollment figures, revenue projections, class sizes, and resource allocation.

Steps to Model the Potential Impact on Enrollment

College and university leaders should engage in scenario planning by developing data-driven models to mitigate the risks associated with the FAFSA delay. Here are the key steps to build a comprehensive enrollment impact model:

1. Analyze Historical Enrollment Data

Start by examining historical enrollment trends from previous years, focusing specifically on the timing of financial aid disbursements and its correlation with student enrollment patterns. Identify any shifts in enrollment that occurred during periods of financial uncertainty or delays in aid distribution.

Questions to consider:

• How have past FAFSA delays or changes in financial aid affected enrollment numbers?

• Are there specific student demographics that are more sensitive to financial aid timing?

  
  

2. Segment the Student Population

Different student segments may react differently to the FAFSA delay. Segment your prospective student base into categories: first-generation students, low-income applicants, out-of-state students, and returning students. This segmentation allows for a more targeted approach to predicting and addressing enrollment fluctuations.

Key metrics to track:

• Dependency on federal aid for each segment

• Average response time to financial aid offers by student group

• Yield rates based on financial aid packages

  
  

3. Incorporate External Data Sources

Integrate external data to enrich your model, including economic indicators, trends in high school graduation rates, and data from peer institutions that might experience similar challenges. Understanding the broader context can help predict how external factors influence students’ decisions.

External data to consider:

• Changes in unemployment rates and economic stability

• Competitor institutions' enrollment trends

• Shifts in high school graduation rates and demographics

  
  

4. Develop Multiple Scenarios

Create a range of scenarios, from best-case to worst-case, to understand the full spectrum of potential outcomes. Consider variables such as:

• A minor delay in financial aid processing

• A significant delay with a widespread impact on students' decision-making

• Alternative funding sources filling the gap

  
  

Assess the potential impact on enrollment numbers, financial aid distribution, and overall institutional revenue for each scenario.

5. Evaluate Contingency Plans

Based on the scenarios modeled, identify contingency strategies to minimize the impact of any enrollment decline. These could include:

• Enhancing communication with prospective students and families about financial aid timelines

• Offering bridge funding or emergency grants to assist students facing short-term financial gaps

• Increasing outreach efforts to emphasize institutional scholarships and merit-based aid

  
  

Implementing the Enrollment Impact Model

Once the model is developed, it’s critical to integrate it into the institution’s broader strategic planning process. This ensures that departments across the university are aligned and prepared to respond to potential challenges. The model should be regularly updated with new data as more information about the FAFSA timeline becomes available.

Communicating with Stakeholders

Clear communication with prospective students, their families, and internal stakeholders is critical. Transparency about the FAFSA delay, its implications, and how the institution plans to address these challenges can build trust and maintain student interest despite uncertainty.

How we can help

At KDM Advisors, LLC, we partner with higher education leaders to navigate complexities like these through data-driven insights and strategic guidance. Contact us to learn how we can support your efforts to adapt to the changing financial aid landscape and safeguard your institution's enrollment goals.

Kenneth Maher is a principal at KDM Advisors, LLC, which partners with higher education leaders to build long-term sustainable business models that ensure financial stability and faculty/staff engagement. You can reach Ken directly at kmaher@kdmadvisors.com.