College financial aid officers urge Congress to address Biden’s gainful employment requirements

A national association representing thousands of college financial aid officers is asking Congress to extend the Biden administration’s deadline for reporting new financial transparency metrics.

The National Association of Student Financial Aid Administrators, which represents roughly 29,000 financial aid professionals at nearly 3,000 institutions of higher education, sent a letter this week to the House and Senate committees with oversight of the Education Department asking for an extension of the gainful employment and financial value transparency reporting requirements until July 2025.

NASFAA cited the botched rollout of the new Free Application for Federal Student Aid application that has produced major setbacks for prospective students and their families, as well as aid officers, for the fall semester.

“What should have been a triumph for the ED and a game-changer for students and families became a
nightmare for student aid applicants and financial aid administrators as it became clear that the ED
had not properly planned for its rollout of the 2024-2025 ‘Better FAFSA,’” the letter from NASFAA CEO Justin Draeger stated.

Draeger sent the letter to Sen. Bernie Sanders (I-VT), the chairman of the Senate Health, Education, Labor, and Pensions committee; ranking member Sen. Bill Cassidy (R-LA); Rep. Virginia Foxx (R-NC), the chairwoman of the House Education and Workforce Committee; and ranking member Rep. Bobby Scott (D-VA).

A new rule from the Biden administration requires traditional universities, trade schools, certificate programs, and other forms of continued education to provide data proving the degrees or certifications they confer are worthwhile in the job market.

The “gainful employment” requirement applies to nondegree programs, such as certificates, trade schools, and proprietary schools. Those programs must show that the debt incurred to obtain the certification makes financial sense once a graduate enters the job market. In other words: Can a graduate reasonably pay off his or her debt in the kinds of jobs they are getting after leaving the program? If not, those programs could lose Title IV federal financial aid funding.

“Financial value transparency” applies to all institutions, including traditional four-year universities, and requires schools to provide similar financial information to prospective students effectively as consumer knowledge. Under this requirement, Title IV funding is not at risk.

Initially, the Biden administration set a July 31 deadline for all schools to procure and transmit the data, but in light of the FAFSA rollout, the Biden administration gave a two-month extension to Oct. 1. As the Washington Examiner reported in April, by that time the Biden administration had not yet even sent schools guidance on how to respond to the federal government, or what kind of information they were required to send.

NASFAA’s members, who serve roughly 16 million students, according to their letter, cited the additional work they were required to do to respond first to the FAFSA rollout, leaving them little time or resources to compile the data to comply with the new rule. Draeger said that financial aid administrators are “already hanging on by a thread.”

“This request does not mean that the ED needs to delay its 2026 target for publishing GE and FVT metrics or for implementing associated warnings and acknowledgments when a program fails those metrics,” Draeger wrote. “While the original timeline provided institutions just a few months to complete their part and provided the ED with two years, our request gives institutions and the ED each about a year to pull together their data and reporting schemas respectively, a fair compromise considering the significant amount of additional work institutions have been forced to take on this year because of the FAFSA issues.”

The FAFSA problems are not just affecting financial aid workers, students, and their families. Universities are concerned that the financial limbo experienced by prospective students will affect enrollment numbers in the fall.

As the Washington Examiner reported, undergraduate enrollment in bachelor’s programs at public and private universities increased for the first time in four years this spring semester. That is the last group of students accepted under the old FAFSA prior to the chaotic rollout.

Some institutions are worried that students who have not received aid offers will delay and ultimately forgo college. Others, according to the Washington Post, believe the lack of enrollment will lead to more financial instability at some schools that were already in dire straits.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

Angel B. Perez, National Association for College Admission Counseling chief executive, told the outlet that some college presidents anticipate 20% to 30% less enrollment than their targets.

“That’s devastating for an institution. But of course, you’re not going to see that at the big flagship publics or the wealthiest institutions,” Perez said. “But you will see that at regional colleges. You’ll see that at small, struggling institutions, that this could be the thing that puts them over the edge.”