Tag: Financial

  • Texas Gov. Orders Financial Investigation of Texas Southern

    Texas Gov. Orders Financial Investigation of Texas Southern

    An auditor said that staffing vacancies at Texas Southern University had contributed to financial mismanagement.

    Istockphoto.com/michelmond

    Texas governor Greg Abbott and lieutenant governor Dan Patrick have ordered an investigation of Texas Southern University, a historically Black institution in Houston, after a state audit found evidence of financial mismanagement and bookkeeping inconsistencies, The Texas Tribune reported. Patrick also said he would look into freezing state funding to the institution.

    The audit found 700 invoices, totaling $280 million, linked to contracts that were listed as expired in the institution’s database. Another 800 invoices, worth $160 million, were dated before the purchases were approved, the Tribune reported. TSU was also months late in turning in financial statements for the past two fiscal years.

    The auditor attributed the errors to staffing vacancies, poor asset oversight and weak contracting processes.

    TSU officials said they had already fixed some of the issues outlined in the audit.

    “Texas Southern University has cooperated with the state auditor in evaluating our processes,” officials said in a statement. “The University enacted corrective measures prior to the release of the interim report, including a new procurement system. We look forward to gaining clarity and continuing to work with the state auditor to ensure transparency for all taxpayers of Texas.”

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  • Skills-based higher education driving student financial support

    Skills-based higher education driving student financial support

    Author:
    Peter Gray

    Published:

    Over the weekend, HEPI published a blog on reclaiming education through localisation for Afghan women and a blog on the future of languages in multilingual Britain.

    Today’s blog was kindly authored by Peter Gray, CEO and Chairman of the JS Group.

    If universities are to adapt to the latest skills-led demands of the Government (and to match the stated national future industry priorities), they will need to look well beyond their course and employability provision at many other aspects of the student experience.

    One such key area is in the connection between student financial support and employability opportunities. It is important that those students from lower-income or more restricted backgrounds are financially equipped and able to take advantage of, for example, off-campus experiences with employers to ensure they aren’t denied these frontline opportunities for skills development and for making connections. While there are many charities working to structure and access these opportunities, it is the funding itself to enable this full participation that needs particular attention.

    That’s why I can foresee a new demand for universities to steer more and more bursaries, scholarships, and special-case funding streams towards helping students with skills-based experiences. It is a trend that is already growing – as JS Group’s latest annual analysis of patterns in student financial support demonstrates. In recent years, we’ve assessed the overall use of £296 million of such support provided to 584,000 students.

    In the last 12 months (the 2024/25 academic year), we have looked at the use of this funding by students, the formats of payments and the timelines of when funding is being used and applied. This data (from our Aspire platform) is immensely important as it can draw on real-time and (student) user-based experiences to ensure universities have the evidence to make future decisions about their student support investments.

    A notable trend this year – which is in part explained by an expansion of participating universities providing data and the use of funding from Turing and Taith public funding schemes – is in how more and more students are using cash-based support from their institution to address the costs of work placements or associated travel, or to recover such expenses.

    Expenses claims are up by more than six per cent, use of placement funds is up three per cent and travel is up by more than one per cent. Our indicators show more action in these areas alongside continued support for accommodation, household bills, groceries and course-based resources.

    Our feedback survey of students as funding beneficiaries also shows the value that they place on funding for levelling-up (in terms of their ability to participate in opportunities) and for strengthening their perception of value and belonging with their university.

    If, as we expect, there will now be a national policy drive to steer more embedded work-related and skills-driven activities as part of the higher education experience, then it makes sense for universities to reassess how they are using their financial support beyond cost-of-living and cost-of-learning applications.

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  • State Financial Aid Increased 12% in 2023–24

    State Financial Aid Increased 12% in 2023–24

    Most funding from the states was in the form of grants.

    PamelaJoeMcFarlane/iStockphoto.com

    States awarded $18.6 billion in aid to students during the 2023–24 academic year, a 12 percent increase from the previous academic year, according to the National Association of State Student Grant and Aid Programs’ annual report.

    “The robust 12% increase from the prior year is further evidence that states understand the importance of postsecondary education and of ensuring every student is able to acquire the 21st century skills needed to drive their state’s economy,” said NASSGAP president Elizabeth McCloud in a news release.

    About 86 percent of that funding came in the form of grants—three-quarters of which were need-based. More than two-thirds of all need-based grants came from eight states—California, Illinois, New Jersey, New York, Pennsylvania, Texas, Virginia and Washington.

    The remaining $2.5 billion of nongrant aid included loans, loan assumptions, conditional grants, work-study and tuition waivers, with tuition waivers comprising 44 percent of nongrant aid.

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  • Education Dept. Subjects Harvard to More Financial Oversight

    Education Dept. Subjects Harvard to More Financial Oversight

    Harvard had a financial responsibility score of 2.8, well over the passing 1.5 required by the Education Department, in fiscal year 2023.

    John Tlumacki/The Boston Globe/Getty Images

    The Education Department announced Friday that it placed Harvard University on heightened cash monitoring, a designation that allows greater federal oversight of institutional finances and is typically reserved for colleges in dire financial straits. 

    By all accounts, Harvard, with its $53 billion endowment, is not.

    “It’s harassment,” said Jon Fansmith, senior vice president for government relations and national engagement at the American Council on Education. “Harvard has the money, yes, but it is adding a headache. It’s adding staff. It’s interfering with students’ ability to access federal financial aid … The government’s making it harder for Harvard to support low-income students, which speaks to exactly what the administration’s goals are here—they’re not to help students, they’re not to improve education, they’re not even to address what they see as concerns at Harvard—they’re just to attack Harvard.”

    Institutions placed on heightened cash monitoring are asked to put up a letter of credit that serves as collateral for the Education Department if the institution closes, or to award federal financial aid from their own coffers before being reimbursed by the department, explained Robert Kelchen, head of the Department of Educational Leadership and Policy Studies at the University of Tennessee at Knoxville. Harvard has been asked to do both.

    According to a Friday news release from the Education Department, Harvard must put up a $36 million irrevocable letter of credit or “provide other financial protection that is acceptable to the Department,” department officials wrote. 

    “Students will continue to have access to federal funding, but Harvard will be required to cover the initial disbursements as a guardrail to ensure Harvard is spending taxpayer funds responsibly,” officials wrote. 

    The federal government froze $2.7 billion in federal grants for Harvard after the university rejected its sweeping demands in April. Harvard sued, and a judge ruled earlier this month that the freeze was illegal. The university has reportedly received some of the frozen funds, but the Trump administration says it’s still hoping to cut a deal with Harvard. 

    The release says three events triggered Harvard’s heightened cash monitoring designation: a determination by the Department of Health and Human Services that Harvard violated Title IV of the Civil Rights Act of 1964 by allegedly allowing antisemitism on campus, accusations that the university isn’t complying with an ongoing investigation by the Office for Civil Rights, and the $1 billion in bonds Harvard has issued to make up for pulled federal funding. Harvard did not respond to Inside Higher Ed’s request for comment Friday. 

    “Today’s actions follow Harvard’s own admission that there are material concerns about its financial health. As a result, Harvard must now seek reimbursement after distributing federal student aid and post financial protection so that the Department can ensure taxpayer funds are not at risk,” Education Secretary Linda McMahon said in a statement. “While Harvard remains eligible to participate in the federal student aid program for now, these actions are necessary to protect taxpayers.”

    The department also pointed to layoffs at Harvard and a hiring freeze instituted in the spring. Several other wealthy colleges have frozen hiring and shed staff this year, in part because of the administration’s actions related to federal funding. A few other universities have either issued bonds or taken out loans to get immediate cash. But so far, the department has made no public mention about putting those colleges on heightened cash monitoring.

    As of June 1, 538 colleges and universities were on heightened cash monitoring, federal data showed. About one-third of those colleges are private nonprofits, while about 42 percent are for-profit institutions. Most of the institutions—464 of them—are based in the U.S. 

    Many on the list are private institutions that have low financial responsibility composite scores, Kelchen said. This test assigns institutions a score between -1.0 and 3.0 based on the institution’s primary reserve ratio, equity ratio and net income ratio. To be considered financially responsible, an institution must score at least a 1.5, which Harvard does. 

    During fiscal year 2023, the latest for which data is publicly available, Harvard’s financial responsibility composite score was 2.8. Harvard’s estimated primary reserve ratio in fiscal year 2023 was 7.6, meaning that the university could operate for about seven and a half years by spending only its existing assets. By comparison, Hampshire College, another private, nonprofit college placed on heightened cash monitoring with a financial responsibility composite score of 0.6, had an estimated primary reserve ratio of 0.3, meaning it could continue operations for about four months before running out of expendable assets. Drew University, another institution on heightened cash monitoring and also with a financial responsibility composite score of 0.6, has a primary reserve ratio of -1.06.

    But beyond the financial responsibility score, there are plenty of reasons an institution can end up on heightened cash monitoring. Some institutions, including Hampshire and Arkansas Baptist College, were put on the list due to a late or missing compliance audit. Others have been put on the list while the department reviews their programs, or because their accreditation was revoked. But, “the department can also just specify that an institution is not financially responsible,” Kelchen said.

    The political motivation behind the move is clear, Fansmith said. 

    “To the extent that there is a problem—and to be clear, there are real problems—it’s not Harvard’s ability to pay their bills or meet their obligations. That’s a problem this administration has created,” he said. “They caused a situation, and then they are blaming Harvard for taking reasonable steps to address that situation. It’s also ironic when they send letters to Harvard using terms like ‘enormous’ and ‘massive’ and ‘colossal’ to describe Harvard’s endowment, and now they’re suddenly determining that they’re worried that Harvard is at financial risk … It is absolutely Orwellian.”

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  • UC employees, unions sue Trump administration over ‘financial coercion’

    UC employees, unions sue Trump administration over ‘financial coercion’

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    A coalition of University of California faculty groups and employee unions sued the Trump administration Tuesday over the federal government’s efforts to “exert ideological control” over the system and its 10 institutions. 

    Over the past three months, the federal government has cut off at least $584 million in grants to the University of California, Los Angeles, sought $1 billion from the system to restore that funding and delivered a wide-ranging list of ultimatums that would dramatically reshape the state’s university system through political interference. 

    In their lawsuit, the coalition — which represented tens of thousands of faculty, staff and students within the university system — called the cuts unconstitutional and an “arbitrary, ideologically driven, and unlawful use of financial coercion” that threatened U.S. higher education and advancement.

    “The administration has made clear its intention to commandeer this public university system and to purge from its campuses viewpoints with which the President and his administration disagree,” the lawsuit said.

    “Campaign to control universities”

    President Donald Trump began laying the groundwork for “his administration’s coordinated attack on academic freedom and free speech and campaign to control universities” shortly after retaking office in January, the lawsuit alleged.

    Since then, Trump has put dozens of colleges on notice at once via civil rights investigations and targeted specific, often well-known institutions — such as Harvard University and Columbia University — that have invoked his ire.

    “Rather than acknowledging educational institutions like the UC as the assets to this nation that they are, the Trump administration views them as barriers to the President’s agenda of ideological dominance,” the lawsuit said.

    At the end of July, the U.S. Department of Justice ruled that UCLA had violated civil rights law by failing to adequately protect Jewish and Israeli students from harassment. A week later, the federal government suspended $584 million in grants to UCLA over the allegations.

    Tuesday’s lawsuit alleged DOJ picked and chose from university documents to make the argument it had wanted to from the start. For example, the agency relied heavily on an October report from UCLA that found antisemitism and anti-Israeli bias on its campus. But DOJ entirely failed to address the improvements UCLA had undertaken since — a factor similar to one cited by a federal judge when she struck down the Trump administration’s $2.2 billion funding freeze at Harvard earlier this month.

    DOJ also did not explain what connection the specific research funding cuts had to alleged antisemitism, forcing all university employees to prepare “for the possibility of significant and immediate termination of funding,” the lawsuit said.

    The University of California, one of the largest research systems in the country, derives a third of its annual operating budget — $17 billion — from federal funding, according to the lawsuit.

    The Trump administration has also unlawfully disregarded the process by which the government can terminate or withhold federal funds, the lawsuit argued.

    Addressing the cuts on Aug. 6, system President James Milliken said they did “nothing to address antisemitism,” but said the University of California would enter into negotiations with the Trump administration to have the funding restored.

    In the event of a major loss of federal funding, the system would need, at minimum, between $4 million and $5 billion just to survive, Milliken told state lawmakers this month.

    Dramatic and expensive ultimatums

    On Aug. 8, two days after Milliken announced the forthcoming negotiations, the system received an unprecedented list of wide-ranging demands from the Trump administration tying its federal funding to total compliance, according to the lawsuit. The plaintiffs cited a copy of the list, obtained by the Los Angeles Times, which the University of California has not made public.

    The letter would require UCLA to install a “resolution monitor” — appointed with final approval by the Trump administration — who would hold significant authority over campus affairs.

    UCLA would also be forced to provide the federal government regular access to “a wide variety of records” on faculty, staff and students, “as deemed necessary by the resolution monitor.”

    “The only exception is for attorney-client privilege, not for speech, association, or privacy purposes,” the lawsuit said.

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  • Cost-smart campuses: Building financial resilience through strategic buying

    Cost-smart campuses: Building financial resilience through strategic buying

    Across higher ed, the financial squeeze is tightening. Between shrinking enrollment and uncertain funding, colleges and universities are scrambling to deliver value with far less cash. Every purchase, from lab beakers to toner cartridges, now faces intense scrutiny. After all, one way to uncover excess spending is to identify blind spots and inefficiencies in how organizations buy.

    That drive for savings puts procurement teams squarely in the hot seat. Seven in ten procurement leaders rank cost management as their most critical capability today and for the years ahead, according to Economist Impact. Yet decentralized purchasing, patchwork systems, and limited spend visibility continue to drain institutional resources.

    Savvy institutions are flipping that script, moving from reactive penny-pinching to proactive value creation by consolidating spend, leveraging supplier partnerships, and centralizing purchasing oversight.

    From reactive buying to proactive value creation

    Financial uncertainty now dominates the higher ed landscape. To navigate it successfully, universities must shift from tactical price checks to total-value management, leveraging lessons from other industries that have successfully implemented AI-powered automations to boost efficiencies and cut costs, University Business reports. It’s the difference between playing defense and offense—both matter, but one drives wins.

    This strategic transformation requires three foundational moves: gaining real-time visibility into campuswide spending patterns, establishing centralized oversight without bureaucratic friction, and building supplier relationships that deliver value beyond the initial purchase price.

    “Reducing spend is important, but increasing value matters more,” shares Rosie Grigsby, senior sales manager for higher education at Amazon Business. “When you’re looking at things only from a price perspective, you’re missing out on other value aspects like quality, lifecycle, support, training, and more,” she explains. “When thinking about total value, I’m thinking about how a supplier is enhancing student experiences while giving university employees time back through efficiencies.”

    To make that possible, procurement leaders would be wise to prioritize the visibility problem: You can’t optimize what you can’t see. Gaining visibility into campuswide spending starts with breaking down the silos that keep procurement teams in the dark.

    Visibility and control: Centralizing spend without adding bureaucracy

    Imagine navigating unfamiliar terrain with a GPS that only shows you one street at a time. When departments buy in silos, institutions lose their ability to see the bigger picture, eroding spend leverage, killing negotiating power, and complicating compliance. Each isolated purchase decision chips away at potential savings and strategic control.

    Consider the cascading impact: With fragmented purchasing, universities could be paying different prices for the same product across departments, missing significant volume discounts, and discovering duplicate software licenses only during audits. Worse yet, audits could reveal policy violations that were invisible until it was too late. 

    Unsurprisingly, research by the IBM Center for the Business of Government shows that centralized procurement correlates with higher savings, efficiencies, and compliance. Even so, many procurement leaders struggle with organization-wide visibility. 

    The solution isn’t building a bureaucratic fortress around every purchase decision. Rather, modern procurement solutions maintain centralized control while giving end users the flexibility they need, eliminating the process bottlenecks that drive departments to work around procurement entirely.

    Solutions could be lying dormant in tools you already own. “Universities often underutilize e-procurement systems and automations they already have licenses for,” Grigsby notes. “Electronic catalogs, automated approval workflows, single sign-ons (SSOs), analytics—tools like these cut time from sourcing to receiving while enhancing compliance and reducing errors.” What once took days of spreadsheet analysis can now happen automatically, freeing teams to focus on strategy, not data entry.

    Building strategic supplier relationships

    Too many institutions treat suppliers as vendors, not partners. Transactional supplier relationships are short-term and price-focused: you buy something, and you’re done. Strategic supplier relationships, on the other hand, are ongoing partnerships built on trust and alignment with the university’s mission.

    “Without strong supplier relationships, you’re missing out on partners who help you anticipate needs, drive innovation, and uncover creative solutions,” Grigsby explains. “True partners embrace your university’s mission as their own and work to maintain or increase service levels through collaborative, strategic sourcing.”

    These partnerships prove especially valuable during budget crunches, Grigsby adds, citing the ongoing collaboration between procurement teams and Amazon Business account executives as an example. “Our higher ed clients often leverage the know-how, experience, and ideas we’ve gleaned from working with their peers across the nation,” she explains. “Whether they’re pursuing sustainability goals or 100% automation in procurement, we help them identify ideal partners or find solutions that have worked well for other institutions facing similar challenges.”

    Real results at Emory University

    Emory University faced the classic procurement challenge: fragmented purchasing and spend visibility. By adopting a centralized purchasing approach through Amazon Business, procurement leaders reclaimed oversight, optimized workflows for users across the organization, and uncovered dramatic savings.

    Guided buying and integrated search features brought the intuitive Amazon Business shopping experience right into Emory’s purchasing system. These integrations drove adherence to procurement policies while giving users flexibility to conduct price comparisons and complete purchases directly within Emory’s existing system. Plus, buyers enjoyed savings through Business Prime shipping and tax exemption on eligible purchases. 

    The payoff was significant, averaging thousands of dollars in savings each month. “Pretty hefty savings,” as one administrator put it.

    Roadmap to resilience

    As institutions rework purchasing strategies to boost value and savings, how can procurement teams position themselves as problem solvers instead of gatekeepers? Grigsby recommends three essential practices:

    • Proactive collaboration: Low collaboration with non-procurement buyers increases rogue buying risk, yet leaders currently rate collaboration as the least essential skill in procurement, according to Economist Impact. “When procurement reaches out to departments early to understand their pain points, especially in times of budget stress, they can engage, identify alternatives, and help internal customers reach their goals without being a blocker,” Grigsby advises.
    • Streamlined processes: Efficient procurement automates mundane tasks like recurring orders, approval workflows, and spend analysis while centralizing oversight. “Customers want to source, reconcile, and receive products easily so they can focus on mission-critical tasks,” Grigsby points out.
    • Broadcast successes: Procurement wins often go unnoticed despite their organizational impact. Share those wins—whether through newsletters, internal communications channels, or dashboards showing how much departments saved—to foster trust and collaboration.

    Looking ahead, the financial pressures facing higher education make procurement transformation a necessity, not a luxury. Modern, cost-conscious procurement isn’t about saying no; it’s about finding better ways to say yes.

    ▷ Learn how Amazon Business can help accelerate your procurement goals: business.amazon.com/education

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  • Financial Aid Advisers Question Trump’s ID Verification Efforts

    Financial Aid Advisers Question Trump’s ID Verification Efforts

    Many financial aid advisers are worried that the Trump administration’s latest effort to bolster identity verification in the student aid system could have unintended consequences. Instead of simply catching fraudulent grant applicants and borrowers, some fear that the verification process could also prevent real, eligible students from accessing public benefits.

    Education Department officials, however, assure aid advisers that one of their top priorities is to distribute aid smoothly to the students who have a right to it, even as they protect the integrity of the taxpayer-funded programs.

    In an electronic announcement published Aug. 12, Federal Student Aid officials said they would be checking the identities of an additional 300,000 aid applicants, on top of the 125,000 students already flagged in June. Some college advisers said they were alarmed by the sheer scale of the requests—especially given what they describe as a very tight timeline.

    While aid officers generally support the concept of catching identity thieves, they fear that requiring students to complete the verification process so quickly could delay or even block aid access for some legitimate students, putting them in a financial hole. FSA says the program will eventually be automated, limited to first-time students and managed by agency officials. But at the moment, it’s a manual process that can affect students midway through their program; financial aid officers say it is becoming increasingly complicated and burdensome.

    “Schools have been asking for help on how to find these people and prevent fraudulent identities from obtaining Title IV aid, so we’re very supportive of the Department of Ed’s attempts to assume responsibility,” said Karen McCarthy, vice president of public policy and federal relations at the National Association of Student Financial Aid Administrators. “Unfortunately, the timing and how long it took ED to get this off the ground means that it’s August … We are entering, if not already in, the season of really large-scale disbursement. If verification is outstanding, schools may have to hold disbursements for those students.”

    The largest unknown seems to be what the consequences of an incomplete or overdue identity verification will be.

    The majority of students in the latest wave of verification requests are returning to college and need to verify their identity for the 2024–25 academic year as well as secure their awards for 2025–26. But some were flagged solely for last academic year and in most instances have already graduated or stopped out, making it harder to track them down and complete the process.

    Verification results for 2025–26 can be submitted up to 60 days after the data portal opens Aug. 31. At the same time, according to a Federal Register notice, verifications and any other changes to aid applications for 2024–25 must be completed by Sept. 13, making for a busy two weeks for students and aid officers.

    Experts have raised a number of questions about whether missing this tight deadline for 2024 could have repercussions. Some fear it could block students from completing future identity verifications or receiving upcoming disbursements; others worry that aid already disbursed in 2024–25 will need to be retracted. Either way, they say, it could have a crippling effect on low-income students.

    “There’s going to be a variety of impact,” one financial aid adviser said. “The monetary impact could be anything from a few hundred dollars to 10-, 15- or 20,000.”

    However, the Office of Federal Student Aid told Inside Higher Ed that missing that deadline shouldn’t be a problem—except in rare situations.

    Verifications for 2024 don’t have to be reported through the portal the same way upcoming 2025 ones do, one agency official said on background. Rather, aid officers just need to verify the student’s identity and determine internally whether a student’s 2024 aid should be awarded; therefore, “there’s no deadline that people are going to hit and fall afoul of,” he added.

    And in the “rare” scenario where an institution discovers inaccuracies on a 2024 FAFSA form, the department said, colleges can reach out to FSA to ensure a student’s eligibility is not impacted.

    ‘We Are Not Blocking Students’

    “If anyone has any examples of that Sept. 13 deadline actually being a blocker for students, we can move the deadline back, because we are here to make sure we are not blocking students,” the FSA adviser said. “There is no reason” a 2024 verification delay should affect a student’s ability to complete the 2025 process and have their award disbursed.

    Department officials also noted that they have streamlined the process to reduce the administrative burden, cutting steps such as making students provide a statement of purpose or notarizing the verification.

    And of the 300,000 aid applicants flagged in the most recent set of verification requests, the external vendor that helped identify them says that at least 50,000 are examples of fraud. The vendor is “very confident” that the other 250,000 are as well, the FSA official said, but the agency is playing it safe and having colleges check each case for good measure before stripping those recipients of aid.

    Ellen Keast, the department’s deputy press secretary, said it’s all part of the agency’s “student- and taxpayer-first mentality.”

    “We are committed to ensuring that every single dollar is spent on eligible students, not fraudsters,” she said. “This is not about putting a burden on postsecondary institutions; it’s about warning them, before they disburse both taxpayer money and their own, that the ‘student’ in front of them is most likely not a real person.”

    But representatives from NASFAA and college financial aid officers are still not clear on how the process will play out.

    Caleb Williams, director of enrollment management at Northern Arizona University, said that in addition to the typical verifications that occurred before the Trump administration’s new campaign was announced, selection rates for 2024–25 verification at his institution rose by 54 percent in June and another 13 percent in August. As he understands it, he added, a student “flagged for Identity verification cannot receive aid in any year until the process is completed.”

    Meanwhile, Charles Mayfield, the director of financial assistance at Northwest Missouri State University, believes that if an institution misses the September deadline for 2024 verifications, it will not be able to reinstate any of last year’s aid. But it would still be able to complete the 2025 verification and process that year’s aid.

    Mayfield hopes that the department will put out clarified guidance to relieve aid advisers’ confusion and explain exactly what the September deadline means, how it will be enforced and what the consequences will be for students. But like the staff at NASFAA, he said his greatest frustration is not the general need for clarification but its timing at the end of an academic year.

    “These students have received financial aid for the whole academic year, and now it’s all going to be taken away, and they’re at risk of not being able to enroll for the next academic year,” he said. “In the industry, we all know that students who stop out are much less likely to finish their degree.”

    It would be one thing if these concerns and challenges were specific to one college, Mayfair said, but when there are 15 or 20 colleges expressing the same confusion on a Listserv on the same day, the department should be more responsive.

    “It feels like when something doesn’t go right, we have to prove to the FSA that it didn’t work the way it was supposed to,” he said. “And until we can outright prove that—using data that’s on their system, that they should already have access to—they won’t acknowledge it.”

    McCarthy from NASFAA said that what the department told Inside Higher Ed about 2024 and 2025 verification being handled separately “sounds promising,” but as of Aug. 22 she hadn’t received the same notification from FSA.

    Other smaller concerns, such as whether the system for flagging fraud is accurate and if the new portal is functional, also have yet to be addressed, she added.

    “It’s an awful lot of work being pushed onto schools,” she explained. “So we want to make sure that it’s useful, beneficial work and that these are actual, really concerning applications, not sloppy work on the Department of Ed which then leads to delays for students.”

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  • Financial aid administrators report disruptions since Education Department layoffs

    Financial aid administrators report disruptions since Education Department layoffs

    Dive Brief: 

    • A large majority of financial aid administrators, 72%, say they’ve experienced “noticeable changes” in the Federal Student Aid office’s communications, responsiveness and processing timelines since the U.S. Department of Education’s mass layoffs in March. 

    • That’s according to a July survey conducted by the National Association of Student Financial Aid Administrators. The results also show that “federal support channels for students are breaking down,” including through issues with call centers, NASFAA said. 

    • These disruptions are hampering colleges’ ability to assist students, it said. “Unless federal service channels stabilize, the aid system risks becoming less accessible, less predictable, and less trusted by the very students it is intended to serve,” it added. 

    Dive Insight: 

    When the Education Department moved to lay off roughly half its staff in March, student advocates voiced concerns that the agency wouldn’t have enough workers to carry out core functions, including financial aid services. 

    NASFAA’s survey builds on those concerns. The survey found that higher shares of financial aid administrators surveyed in July said they are experiencing delays and a lack of communication from the Education Department than those polled just two months before. 

    For instance, 59% of officials surveyed in May said they had experienced disruptions in the Federal Student Aid office’s responsiveness, communication and processing timelines — a number that has since jumped to 72%.

    Ellen Keast, deputy press secretary at the Education Department, sharply rebuked the survey. 

    “It is an embarrassment for NASFAA to release a ‘survey’ that blatantly parrots falsehoods and is not representative of the higher education community nor the American people’s overwhelming charge for change,” Keast said in an emailed statement Wednesday. “Clearly, NASFAA is peddling a false narrative to preserve the status quo.”

    An Education Department official accused the survey of having methodological shortcomings. The official pointed to the survey’s response rate — completed by over 549 institutions — saying that represents less than 10% of the roughly 5,800 colleges that work with Federal Student Aid. 

    The official also said questions spurred respondents to report negative experiences and that those polled were overrepresented by administrators working at nonprofit and public four-year colleges, which the agency accused as being the most likely to oppose the Trump administration. 

    Additionally, the official said the mass layoffs did not impact FAFSA staff or Federal Student Aid’s ability to serve customers. 

    Melanie Storey, president and CEO of NASFAA, said in a statement that the survey reflects “the real, everyday experiences of financial aid professionals.”

    “To dismiss these concerns as fabricated or political undermines the expertise of those working directly with students every day, eager to deliver on the promise of postsecondary education, and shows that the administration is not interested in working with experts in the field to achieve the best results for students; instead, it is focused on advancing its own agenda,” Storey said. 

    In the survey, 32% of respondents said they’ve experienced processing delays for the Free Application for Federal Student Aid since May. 

    Earlier this month, the Education Department began beta-testing for the 2026-27 FAFSA form. So far, more than 1,000 students have completed the form, according to a department official. 

    Meanwhile, 49% of financial aid administrators have experienced processing delays with the e-App, the application colleges submit to the Education Department to participate in federal financial aid programs. Among colleges that submitted the e-App, 63% said in July that it still had not been processed. 

    More students are reaching out to their financial aid offices, according to the survey. Sixty percent of administrators said they’ve seen spikes in student questions about the Education Department’s services in the July poll, compared with 45% who said the same in May. 

    While several respondents said students were confused about the FAFSA process or federal aid, not all officials specified whether the inquiries were related to the Education Department’s mass layoffs or other recent federal changes.

    Republicans recently made sweeping changes to the student loan system through their massive domestic policy bill signed into law in July. That includes consolidating the student loan repayment programs into just two options and phasing out Grad PLUS loans, which allow graduate and professional students to borrow up to the cost of attendance. 

    Critics have noted that the Education Department will have to carry out the vast policy changes mandated by the bill with about half the workforce it had before President Donald Trump retook office. 

    U.S. Education Secretary Linda McMahon has framed the layoffs as the first step to Trump’s goal of eliminating the Education Department and shifting its duties elsewhere — a change that would require congressional approval. 

    A federal judge initially blocked the Education Department’s mass layoffs, but the U.S. Supreme Court lifted that order in July while litigation challenging their legality proceeds.

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  • American Financial Solutions and Borrower Defense to Repayment

    American Financial Solutions and Borrower Defense to Repayment

    [Editor’s Note: The Higher Education Inquirer has submitted a Freedom of Information Request F-2025-02034 for any Federal Trade Commission consumer complaints against American Financial Solutions. We expect student loan relief scams to grow over the next few years as federal government oversight is reduced.]

    American Financial Solutions (AFS) positions itself in social media as a lifeline for student loan borrowers, offering help with programs like Borrower Defense to Repayment (BDR), PSLF, closed-school discharge, teacher loan forgiveness, and income-driven repayment. They advertise a “95 percent success rate,” more than $25 million in loans discharged, and over 10,000 clients helped. AFS promotes a three-step approach: a free consultation, documentation collection, and federal application submission—with implied guarantees of approval. They even suggest that discharges can occur in as little as 12 to 36 months.

    Behind this polished marketing is a disturbing reality. When contacted directly, AFS quoted a $1,500 fee to file a Borrower Defense claim. The Department of Education provides this service for free, which makes the fee an unnecessary financial burden on people already struggling with debt. Worse still, AFS representatives falsely claimed that approval would be “guaranteed” because the borrower’s school was named in the Sweet v. Cardona settlement. That is not how the Sweet settlement worked, and no private company can guarantee outcomes in federal relief programs.

    AFS also collects a troubling amount of data from borrowers. According to its own disclosures, the company asks for names, contact information, educational histories, student loan details, financial information, and documentation of borrowers’ school experiences. It also stores communications and any additional information provided. Beyond that, the company automatically harvests website usage data, including IP addresses, device and operating system information, pages visited, time spent on the site, referring websites, and even search terms. This means that vulnerable borrowers are not only charged excessive fees but also exposed to unnecessary risks regarding their personal and financial data.

    While AFS presents itself as a nonprofit credit counseling agency with A+ BBB accreditation, consumer complaints suggest a lack of transparency and responsiveness. One unresolved 2024 complaint alleged billing issues, with the consumer insisting they were not liable for a debt and had no contract, while the company failed to respond. Independent review platforms show a mix of praise and criticism, with some clients reporting successful debt management experiences, but others raising questions about hidden costs, communication problems, and misleading claims.

    The bigger problem is that AFS fits a well-documented pattern of predatory practices in the student loan relief industry. Over the past decade, the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) have repeatedly shut down companies that charged for free government services, misrepresented their powers, and lied about forgiveness guarantees. In one case, the CFPB shut down Student Aid Institute, only to see its operator resurface under a new name and steal more than $240,000 from borrowers. In another, Monster Loans and its associates were sued for defrauding over 23,000 borrowers. The FTC has also acted against multiple operations that bilked millions of dollars from borrowers by pretending to be affiliated with the Department of Education. Even Navient, a major loan servicer, agreed in 2024 to pay $120 million after deceiving borrowers about repayment options.

    The risks to borrowers are increasing as federal oversight weakens. In 2025, reports revealed that the CFPB planned to scale back enforcement of student loan cases, leaving state regulators—who often lack resources—to fill the gap. Critics warned this would create “open season” for scammers. Against that backdrop, companies like AFS are free to charge high fees, collect sensitive data, and make deceptive promises while vulnerable borrowers remain unprotected.

    American Financial Solutions is not a solution. It is part of the problem, a business model that profits by charging people for free services, misrepresenting the law, and exposing them to new risks. Unless stronger oversight and enforcement are restored, borrowers will continue to be victimized first by predatory schools and then by predatory “relief” companies cashing in on their desperation.

    Sources

    American Financial Solutions marketing claims. amerifisolutions.com

    AFS data collection disclosure (website policy provided by user)

    Better Business Bureau profile. bbb.org

    BBB consumer complaint (2024). bbb.org

    Trustpilot reviews. trustpilot.com

    ConsumerAffairs reviews. consumeraffairs.com

    BestCompany review. bestcompany.com

    CuraDebt expert analysis. curadebt.com

    Federal Trade Commission. “American Financial Benefits Center Refunds.” ftc.gov

    Consumer Financial Protection Bureau. “CFPB Seeks Ban Against Operator of Student Loan Debt Relief Scam Reboot.” consumerfinance.gov

    Consumer Financial Protection Bureau. “CFPB Takes Action Against Operators of an Unlawful Student Loan Debt Relief Scheme.” consumerfinance.gov

    Federal Trade Commission. “FTC Acts to Stop Scheme that Bilked Millions out of Student Loan Borrowers.” ftc.gov, December 2024

    Federal Trade Commission. “Student Loan Debt Relief Scam Operators Agree to be Permanently Banned.” ftc.gov, May 2025

    Time Magazine. “Navient Settlement: Student Loan Borrowers to Receive Payments.” time.com, 2024

    The Guardian. “Brad Lander: CFPB Cuts Create Open Season for Fraudsters.” theguardian.com, May 2025

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  • The hidden cost of learning: how financial strain Is reshaping student life

    The hidden cost of learning: how financial strain Is reshaping student life

    • This HEPI guest blog was kindly authored by Cheryl Watson, VP of Education, UK at TechnologyOne.

    Rising costs are now a defining feature of the student experience in the UK. What once felt like an educational ‘coming of age’ for young people is, for many, becoming a difficult balancing act between academic ambition and financial survival.

    From housing and transport to food and essential tech, students today face relentless financial pressures just to participate in university life. For institutional leaders, the evidence is clear: the financial landscape is changing, and approaches to student engagement and support must change with it.

    A growing financial gap in UK higher education

    Financial pressures on students are not new but are growing in scale and complexity. The joint Minimum Income Standard for Students (MISS) 2024 research with HEPI and the Centre for Research in Social Policy (CRSP) at Loughborough University found that a typical full-time student living away from home needs around £244 per week to maintain a minimum standard of living. Yet, most face a significant shortfall even with part-time work and maintenance support.

    This gap impacts attendance, well-being, debt levels, and student retention. National data shows that 30% of students take on additional debt to cover basic living costs. At the same time, HEPI and Advance HE’s 2025 Student Academic Experience Survey found that more students are working part-time (68%) than not, often juggling jobs alongside demanding timetables.

    One student from the recent MISS focus groups summed up the reality:

    Even [like] knowing that I’m in my overdraft…I know it’s interest-free and stuff, but having to rely on it is not ideal, and I want to work to try and get out of it, but also like I can’t afford to.”

    It’s a cycle, and you constantly max it out every year, and then you’re constantly working to pay it back.

    This financial tightrope is increasingly common.

    How student life is being redefined by cost pressures

    Students are making tough choices daily between travel, food, work, and study. Financial stress is changing not just what students can afford, but also how they experience university life on a day-to-day basis.

    While pressures vary, the underlying theme remains consistent: rising costs are reshaping the student experience in real-time.

    The new commuter reality

    Many universities still operate around the traditional student living on campus, but according to the Sutton Trust, over 50% of UK students go to university where they grew up and students from poorer backgrounds are three times more likely to commute from home.

    For many, this is often because they cannot afford to live near campus. This has real academic consequences, with many students missing classes due to travel costs and disconnected timetables.

    I live in Sheffield but a lot of the people in my class seem to commute and there’ll be times where like most of the class don’t turn up for a certain seminar and it’s because… it just wouldn’t make sense to pay all that money to come for an hour and a half and then just leave again.

    Without more flexible, student-aware scheduling and targeted support, commuter students risk being structurally disadvantaged.

    Technology isn’t optional

    Access to digital tools is now essential for participation in academic life. From lecture recordings to online submissions, students are expected to stay constantly connected and equipped.

    You definitely need a laptop as well because although the University library provides computers, especially during exam season, you have to book them in advance, and they’ve already been taken up.

    For many, the cost of keeping up with technology adds to financial pressures, creating further barriers to participation.

    Living with financial stress

    Financial pressure is a constant presence for many students. Overdrafts are used regularly, part-time work is essential, and mismatches between payment schedules and bills force difficult choices.

    In 2023, HEPI found that more than a quarter of universities operate food banks to support students, while rising rent costs leave little left for essentials.

    The difference between first year and second year is that you have that comfort blanket of it, but by the time you get into second year, you’ve already used it, and you’ve got nothing to help you anymore.”

    These aren’t one-off lapses in budgeting. They’re the result of an unsynchronised system that does not reflect the financial reality students are working within.

    Missing out on student life

    Financial pressures also limit participation in the social and community aspects of university life that are vital for wellbeing and development.

    Especially in the SU, it’s not ideal because lots of societies will do socials there so if you can’t afford that… It might seem silly, but if you’re part of a sports society then there is some sort of expectation to go to Sports Night on a Wednesday most weeks so that obviously adds up if you’re going most weeks.

    MISS24 found that 55% of students missed out on social experiences and 53% skipped extracurricular activities due to financial constraints.[AC1] 

    Opting out is often the only option, but it comes at a cost to confidence and connection

    Why this matters for universities and policymakers

    Financial stress is no longer a fringe issue in UK higher education. When 30% of students are taking on extra debt just to cover essentials, and many are skipping classes or missing out on key experiences, the impacts on retention, well-being, and academic outcomes cannot be ignored.

    The disconnect between what students need and what current funding models assume continues to grow. Part-time work and family contributions are often treated as standard, despite being unrealistic for many students.

    What’s next: Building an evidence base for change

    If the Minimum Income Standard for Students 2024 brought much-needed clarity to the financial pressures facing undergraduates, this year’s follow-up takes that work a step further.

    The upcoming report, Minimum Income Standard for Students 2025 (MISS25), focuses specifically on first-year students living in purpose-built accommodation, offering the most detailed insight yet into the cost of starting university life in the UK.

    The findings are stark. Those on minimum support face a funding gap that must be filled by family or debt. The report also reveals a growing mismatch between student needs and how maintenance systems are designed, particularly for those without access to parental support.

    For institutional leaders, policymakers and student advocates, we encourage you to read closely, and to consider how your planning, funding and engagement strategies can respond to what today’s students are telling us.

    Click the link below to sign up for a copy of the MISS25 report when it’s ready.

    Sign up for a copy of the report 

    TechnologyOne is a partner of HEPI. TechnologyOne is a global Software as a Service (SaaS) company. Their enterprise SaaS solution transforms business and makes life simple for universities by providing powerful, deeply integrated enterprise software that is incredibly easy to use. The company takes complete responsibility to market, sell, implement, support and run solutions for customers, which reduce time, cost and risk. 

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