If you’re a college bound teen, or especially the parent of one, perhaps you’re concerned about the fallout from this month’s massive layoffs at the Department of Education, where nearly half the workforce has been cut. As a parent, I understand your angst; as a higher ed professional with decades of experience, access and relationships, I’m taking a balanced approach which will hopefully assuage your fears.
As you try to sort through the endless cycle of news and noise, try to keep the following three points in mind:
- As it relates to federally-funded Pell grants – the layoffs should have minimal impact on most of you. While the Federal Government provides the largest aggregate amount of grants to undergraduate students (in excess of $30 billion); those grants that cap individually at $7,395 represent only a tiny fraction of what you will receive from Institutional-based grants and scholarships. Further, Pell Grants are typically awarded to students whose families demonstrate near-zero assets and earn less than $60,000 per year. If you are in this segment, you will want to make sure you are proactive in your effort to apply (or re-apply) for aid in October 2025.
2. We never recommend using loans as a primary means to fund college – loans are a last resort. Indeed, federal loans (both subsidized and unsubsidized) that are accessed by completing a FAFSA typically offer better terms than the commercial bank variety. Yet our focus for our families has always been and remains the funding available through Institutional based Grants and Scholarships (true discounts). To that end, the current Dept. of Education rules and regulations for demonstrating need at the institutional level remain in force under Title IV legislation. Should those rules/regs change, we’ll adapt proactively, as we have in the past. Further, those rules/regs are merely the baseline – or entry point- for how MOST universities set grant and scholarship policies. How, to what extent and for which students any college or university will discount is individual to that university and something that we track and communicate about regularly with the administration of the universities to where our students apply.
3. You should already know that the government systems (like FAFSA) are fraught with bugs, delays and unintended consequences. We manage those for our clients with our own software and relationships. And to that point, while the reduction in force at the Dept. of Education likely contributed to a recent one day shut down of the FAFSA system, I’ve been in communication with techies involved in the program who informed me that many IT folks were hired back to address the latest FAFSA challenges. This was confirmed by the media yesterday.
The staffing cuts at the Department of Education will have short term ripple effects on the financial aid landscape. There will be website outages, delays in application processing and, in turn funding of federal aid (both grants and loans), and long hold times for families requiring support. The proposals to move the Office of Federal Student Aid to other agencies, either at Treasury or the Small Business Administration, come fraught with logistical and administrative challenges that could impact the short term but should be addressed in the long term.
In the meantime, I understand how concerning and chaotic the changes appear. I’m following the legislation and systems carefully so as to minimize the fallout, both tangible and emotional, on my clients. If you have any questions or concerns for your family, with respect to financial aid or general college admissions concerns, please feel free to reach out.
