The Department of Education gets an “F” for failing to accurately process tens of thousands of financial applications for the second time this year because of a website error. As a result, thousands of poor students received less in aid than they should’ve qualified for while some wealthy students received higher aid packages than they truly need.

What will they tell students who forwent attending a particular school because they thought they couldn’t afford it? And good luck trying to recoup the funds from students who received more money than they qualified for. With class already back in session, colleges have probably already cashed those checks.

Last July, DOE admitted a mistake with the format of the online version of the Free Application for Federal Student Aid (FAFSA) form that asked for students to round to the nearest dollar when reporting incomes for themselves and parents but misapplied the decimal. As the Daily Caller calculates, a student who earned only $1,000 the year before could’ve mistakenly logged an income of $100,000. Imagine what that means for their aid award package, especially for grants. As a result, 180,000 applications suspected of being given excessive financial aid were reprocessed.

A second batch of almost 160,000 applications will now be reprocessed as well for the same reason – to target those who may have received too little.

The higher education publication Inside Higher Ed reports:

The misreported adjusted gross income, in some cases, may have led students to be denied for a Pell Grant or have their award reduced from what it should have been had they correctly filled out the Free Application for Federal Student Aid, known as the FAFSA. Some of those errors were caught in July when the department reprocessed 182,155 applications to correct a similar error in the "earned income from work" box, officials said.  Most of those applications, however, involved students appearing qualified for more aid than they should have been.

In the current batch of reprocessing, department officials said they are targeting applications where a student's adjusted gross income is greater than $100,000 or a parent's adjusted gross income is listed above $500,000…

The department on July 1 reprogrammed its online FAFSA form to automatically drop any fractional dollar amounts that are erroneously entered into the system, which accepts only whole numbers, in order to prevent the problem from recurring. 

This is an embarrassing error for DOE and I wonder if only occurred this year. The damage is already done for incoming students who –at this point– probably won’t be able to change the institution at which they are matriculating this September. For current students it may be either a breath relief or a new burden for them and their parents who will have more to come up with.

Beyond just the effects of a decimal point is a conversation about how students today finance their education. Increasingly, it’s through public funding. Grants that have no requirement for repayment are nice but government-backed loans are fueling the rise in higher education costs. Colleges and universities can charge more each year for tuition, room-and-board, and other fees, because they know that students and families can secure more funding from the government. The true costs to individual students are delayed until after they graduate into a job-lyte economy. 

It’s a burgeoning bubble that is bound to burst.  Americans carry over $1 trillion in student loan debt and for my generation, it’s a leading concern followed by unemployment. Young people with college and graduate school debt postpone homeownership, marriage, and starting families. The rippling impact has an effect on the economy.

For the students who had forgone what they might have thought of as their dream school for an education at a less expensive institution, there is a bright side to the DOE's rounding error. If they work hard they may very well still end up on the path of success they desire, just with less debt to weigh them down.