By October, the scale of the crisis was clear.

State grants that thousands of students were counting on to pay for college were weeks behind schedule. The botched rollout of a new federal financial aid form had already caused serious delays. Then, the new software system the Pennsylvania Higher Education Assistance Agency was using to run the grant program slowed things down even more.

“I am just sick over the situation we are in with the new system,” Elizabeth McCloud, a top official at PHEAA, emailed a colleague on Oct. 13. The upgrades were intended to make running the program more efficient. But the feedback was clear, McCloud wrote: the new software was “falling short.”

The Pa. State Grant Program is the commonwealth’s largest need-based financial aid program, giving more than 100,000 students an average of $2,000 each semester. PHEAA relies on data from the federal government to determine which students are eligible.

A Spotlight PA investigation based on more than two dozen interviews and hundreds of pages of emails obtained through public records requests provided a behind-the-scenes look at how the program was thrown into turmoil last year.

PHEAA’s decision to forge ahead with a new and unproven system while grappling with unprecedented federal delays proved to be a critical mistake. As a result, students were left waiting months longer than usual for urgently-needed aid. Students told Spotlight PA they took out loans, spent down their savings, and scrimped on bills to make up the shortfall.

PHEAA struggles

As the problems piled up, PHEAA struggled to communicate with students and schools about the delays. Meanwhile, financial aid administrators grappled with an unfamiliar system that was riddled with glitches, some of which still had not been resolved by March.

Ahead of releasing the new software, PHEAA said it would be streamlined and user-friendly, “to get what you need faster.” But when it launched, it was slow to load and difficult to use, school administrators said. Many student records were missing crucial information. Updates submitted to PHEAA could take weeks to process.

Four financial aid administrators told Spotlight PA they could not think of anything about the new system that was better than the old one.

“It’s still hard to navigate even now,” Christy Snedeker, director of undergraduate financial aid at Wilkes University, said in March. “It’s just not very informative of a system at all.”

School administrators questioned why PHEAA pressed ahead with its software upgrades during what was already an unusually turbulent year in the world of college financial aid.

PHEAA officials said there was no way the agency could have anticipated the extent of the disruption caused by the changes to the federal form that acts as the backbone of the financial aid system nationwide.

By the time this was clear, it was too late to return the whole program to the old system, which would have taken months of work, said Nathan Hench, PHEAA’s senior vice president for public affairs. Instead, the agency used both the old and new systems, moving data back and forth between them, which eased some difficulties while creating others.

In February, PHEAA announced that it would run the program off the old system in the coming academic year, before relaunching the new one in 2026.

“We just can’t have another year like ‘24-25,” Hench said.

7 months late

In a normal year, students receive grant funds for the fall semester by early September. This year, some were still waiting as late as the end of March. Some grants for the spring semester were also delayed.

“I just don’t understand how badly a system has to be designed for them to take this long,” said Nicole Etolen, whose son was still waiting on more than $1,500 in aid for the fall semester more than three months after it ended.

“You’re tired of PHEAA, we’re tired of PHEAA, it’s going around,” a financial aid counselor at Northampton Community College told Etolen’s son in an email earlier this year. “Sadly, no updates.”

To establish which students qualify for the grants, PHEAA depends on updates submitted by financial aid officials at colleges and universities, in addition to FAFSA data.

But in October, when school administrators tried to use the new system, they ran into one mishap after another. And inside PHEAA, frustration over the IT issues was mounting.

“Like, is this a system lag or what?” one agency staffer asked colleagues, frustrated that a change to a student’s file submitted by a community college had taken more than two weeks to appear.

“I feel like I’m running in circles trying to constantly fix things and make changes just for records to sit and nothing happen,” she vented.

“I can’t even figure out how to determine if a record went through screening and when.”

The tech troubles fell into two categories, according to a summary of feedback from PHEAA employees that was shared with agency management. Some functions the agency had requested from the contractor hired to build GrantUs didn’t work, or had been missed. Others couldn’t be turned on because the influx of records from the federal government had bogged the software down, making it very slow to load.

In the fall, it could take as long as two minutes to pull up a student’s file, financial aid staff told Spotlight PA. As they worked through hundreds, or thousands, of student records, those minutes added up. The lags made it hard to tell whether the system was still processing, or had timed out. One financial aid administrator complained to PHEAA in October that he seemed to be spending longer waiting for GrantUs to load the next page, or process his changes, than actually updating student records.

To deal with the software lags, PHEAA officials decided over the summer to use the old mainframe for some crucial functions. But since the two systems were not designed to be connected, this caused problems of its own. The agency had to transfer data from GrantUs to its predecessor, run calculations, then send it back again — a process that could take days.

Financial crunch

Many colleges and universities tried to shield students from the financial blow of the delays by waiving late fees, crediting their accounts with estimated grant amounts, and relaxing policies that typically prevent those with outstanding balances from registering for classes. Still, there was less that schools could do for students who needed the grant money to pay rent, or buy groceries and gas.

As February turned to March, Tiffany O’Brien was still waiting on almost $2,450 in aid for the fall semester. O’Brien, who is enrolled in a surgical technology program at Carlow University in Pittsburgh, said the delay forced her to use up her savings. By January, she said, her bank account was down to $92.

“I feel like this grant money is designed to prevent me from being in this position, and now I’m here,” she said.

O’Brien finally received the money in March.

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