Can We Make Late Disbursements If the Paper FAFSA Is Not Yet Processed By the FPS?

Scenario: The U.S. Department of Education (ED) is working through a backlog of paper FAFSAs that have been returned to students because of errors or missing information, and/or paper FAFSAs that have been lost or misplaced. The FAFSA will not show as processed with an official student aid index (SAI) until the errors are resolved and missing information is received by the FAFSA Processing System (FPS).

Answer: No, but there is a flexibility when it comes to getting a valid Institutional Student Information Record (ISIR) or a FAFSA Submission Summary (FSS) in time to meet the 180-day requirement.

According to guidance NASFAA has received from ED, the school must have an ISIR or FSS with an official SAI (one that is calculated by the FPS) in order to meet the conditions for a late disbursement under 34 CFR 668.164(j)(2). Even with documentation showing the application date, an ISIR with an official SAI is needed to move forward. In other words, if the FAFSA has not been entered and processed by the FPS, there is no action the school can take to move forward on aid disbursement regardless of the date.

Then, under 668.164(j)(4)(iv), to make the late disbursement, the school must have a valid ISIR or FSS (one on which all data are correct) by the deadline date published annually in the Federal Register for each award year (e.g., September 20, 2025 for the 2024-25 award year). However, there is an exception. Electronic Announcement GENERAL-24-143 states the following:

"Additional Flexibility to Establish the 180-Day Late Disbursement Timeframe

The late disbursement requirements established under 34 C.F.R. § 668.164(j) contain several conditions including a requirement that a late disbursement must be paid within 180 days from when the institution determined the student withdrew or when the student became ineligible (dropped below halftime, completed their period, etc.). The Department is aware that, even if the student is able to meet the expanded Application Receipt Date allowance in the circumstances outlined in this Electronic Announcement, a student may still not be able to receive a late disbursement of Title IV funds due to the 180-day late disbursement timeframe restriction.

Therefore, to minimize the impact of any Department system delays on the ability of students to receive Title IV funding they would otherwise be eligible to receive, for this limited circumstance, for students who filed paper FAFSA forms for the 2024-25 award year, the 180-day late disbursement timeframe will start from the later of: (1) the date the student withdrew or otherwise became ineligible for the award year, or (2) the earliest Transaction Processed Date with an official SAI."

This flexibility applies to the requirement to have a valid ISIR (or FSS) by the 180-day deadline and not to the official SAI requirement. It changes when the 180-day clock starts, but disbursements still must be made within 180-days of that start date, whichever start date applies. According to ED, even if the semester ends, or the student ceases enrollment, as long as the school can document (even by their own statement) attempts to submit a completed FAFSA and to get a valid ISIR, the school can disburse Title IV aid to the otherwise eligible student once they get a valid ISIR. This assumes the student is otherwise eligible and has no default or other issues that would render the student ineligible.

Other Late Disbursement Conditions and Limitations: See 668.164(j).

Application of Guidance: This guidance applies to all paper FAFSA filers, including confined and incarcerated students. While GENERAL-24-143 specifically mentions the 2024-25 award year, some 2025-26 FAFSAs may have been affected as well.

Paper FAFSAs Not Entered by June 30: ED will continue to enter and troubleshoot issues for paper FAFSAs that were submitted via mail to the P.O. box and still not entered by June 30. The FPS cutoff date is not until September. The FAFSA team hopes to have FAFSAs keyed in and issues resolved before the end of the award year (June 30).

Assistance: If you need assistance troubleshooting for a specific student, reach out to the FPS Help Desk at 1-800-330-5947 or by email at [email protected]. ED will need student-specific details that you cannot provide to NASFAA. This is true even for students who are confined or incarcerated; ED has indicated that  [email protected] should not be used for FAFSA processing issues.