Shifting Ground Part 1: The Federal Shake-up in Higher Education
The question for presidents, CFOs, enrollment leaders, and financial aid directors isn’t whether change is coming—it’s how to prepare for it now.
What’s Changing: A Shrinking Department of Education
While the Department of Education has historically focused much of its resources on K–12, it has supported higher education in four critical ways:
-
Billions in aid: Disbursing loans, grants, and work-study dollars
-
Civil rights enforcement: Ensuring compliance on campuses
-
Data insights: Gathering and analyzing student data for policy and trends
-
Accreditation oversight: Safeguarding eligibility for federal aid
But today, the ground is shifting. Conversations in Washington suggest that these functions could be redistributed:
Why This Matters
For institutions with strong cash reserves, delayed federal disbursements may be inconvenient but manageable. For schools already operating with tight budgets, disruptions to aid flow could present serious financial risks—potentially affecting payroll, vendor contracts, and, most critically, student enrollment.
Another looming challenge? The loss of a centralized knowledge hub. The Federal Student Aid Office (FSA) is a trusted resource for interpreting policies and answering compliance questions. Splitting its functions among multiple agencies could create confusion and slow down response times—exactly when clarity is needed most.
Strategic Actions for Campus Leaders
To weather this period of instability, campus leaders need to act before the disruption reaches a tipping point:
| Action | Why It Matters |
|---|---|
| 1. Build Contingency Plans | Model operational and cash flow scenarios in case federal aid is delayed. |
| 2. Secure Expertise | Partner with financial aid compliance experts to interpret shifting regulations quickly. |
| 3. Strengthen State-Level Relationships | Build connections with state authorities to anticipate new responsibilities and compliance expectations. |
| 4. Monitor Federal Developments | Stay informed on HEA discussions—changes here will have the broadest ripple effects. |
A Leadership Moment
This shake-up is not just an operational issue—it’s a leadership moment. Institutions that proactively plan for disruption, cultivate expert insight, and maintain agility in their operations will be better positioned to safeguard their financial health and their students’ trust.
Change is inevitable. Strategic readiness is optional.