Clean financial aid audits never happen by chance. They are a result of embedding compliance best practices into your systems, staffing, and office culture.  In many ways, compliance is the trust currency of financial aid. Without that trust, even the best technology or fastest packaging timeline can’t prevent the ripple effects—disrupted funding flows, leadership concerns, and weakened student confidence. 

Why Compliance Can’t Be an Afterthought 

Title IV regulations consist of over 1,000 pages of regulation and many of them read as densely as a tax code. While the rules are federally defined, institutions still face real-world challenges in applying them consistently.  

The complexity of successfully following these rules is compounded by how differently institutions apply them in execution—based on local policies, staffing capacity and operational constraints.  

And the stakes are higher than ever. When polled about the top challenges faced by financial aid teams, 48% of leaders cited changing federal, state, and local regulations. Because when institutions fall out of compliance, they don’t just get a warning, there is a significant risk of being placed on Heightened Cash Monitoring (HCM) status, a designation that disrupts aid disbursement, often overwhelms staff, and triggers immediate reputational risk. 

The Hidden Cost of Non-Compliance 

Besides the financial impact, the cost of compliance is also operational and reputational. Even under the best conditions, staying compliant with state and federal regulations can carry a steep cost.  A multi-institutional study found that colleges and universities spend between 3% and 11% of their annual operating budgets (excluding hospitals) on federal compliance.  

The hidden costs of non-compliance are too high to ignore. When an institution enters HCM status, an already understaffed financial aid department becomes solely focused on mitigating its compliance issues, and the student experience suffers. Add to the situation staff burnout, enrollment delays, and reputation loss – it’s clear the costly effects of not remaining in compliance.  

When an institution is placed on Heightened Cash Monitoring (HCM), those costs accelerate, triggering staff challenges, delayed disbursements, and strained trust with students and leadership alike. Rebuilding credibility—not just compliance, can take years. 

“Too many colleges and universities underestimate the financial risk they’re carrying around compliance, and those are consequences that can have a significant impact on your institution and your students.” 
— Robert Heil, Challenges Deserve Solutions, Episode 4 

Compliance is a Shared Responsibility

Compliance is not just a financial aid issue; it’s a university-wide concern. Managing Title IV aid demands collaboration between Academic Records, Financial Aid, and Information Technology Services to ensure consistent and precise reporting. When these departments align, they create the foundation for A Better Compliance Model—one of the four strategic pillars of the FAS Better Financial Aid Model.  

Strategic Outcomes of a Better Compliance Model

When institutions embrace proactive compliance, they gain: 

• Fewer audit surprises

• Consistent funding flows

• Increased leadership confidence

• Innovation without fear

What Keeps You up at Night about Compliance?

If compliance risk is pulling your team into reactive mode or keeping leadership on edge, it’s time for a better model. Connect with FAS today and let’s talk about building compliance operations that don’t just protect your institution but help it stay ahead of the curve.