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Showing posts sorted by date for query student loans. Sort by relevance Show all posts

Wednesday, April 16, 2025

College Meltdown 2025, Quarter 1: Here we are, at another fork in the road.


In an August 2022 interview with Gary Stocker of College Viability, I offered a chilling projection for U.S. higher education and the College Meltdown:

“The worst-case scenario is that colleges are involved on both sides of a Second US Civil War between Christian Fundamentalists and neoliberals. Working families will take the largest hit.”

It’s a stark and provocative warning, but one grounded in decades of neoliberal policy, predatory capitalism, and ideological warfare. From our perspective at the Higher Education Inquirer, the College Meltdown is not a future risk—it’s a slow-moving catastrophe already unfolding.

Two Fronts in a Cultural and Economic War

On one side of this looming conflict are Christian fundamentalists who seek to remake public education in their own image: purging curricula of critical perspectives, defunding public universities, and promoting ideological orthodoxy over inquiry.

On the other side are neoliberal technocrats, who have transformed higher education into a marketplace of credentials, debt, and precarious labor. Under their regime, colleges prioritize growth, branding, and profit over education, equity, and labor rights.

Both groups, while ideologically different, are willing to use colleges as instruments of power. In doing so, they turn institutions of higher learning into ideological battlegrounds, undermining their civic purpose.

The Educated Underclass: Evidence of Collapse

One of the most visible outcomes of this dysfunction is the rise of the educated underclass. These are people who did what they were told: they went to college, took on debt, and earned degrees. Yet instead of opportunity, they found instability.

“A large proportion of those who have attended colleges have become part of a growing educated underclass,” Shaulis noted in his interview with Stocker.

This includes:

  • Adjunct instructors working multiple jobs without benefits

  • Degree holders underemployed in gig work

  • Students lured into expensive, low-return programs at subprime colleges

These individuals are too educated for social support but too broke for economic stability. They are the byproduct of a system that treats education as a private investment rather than a public good.

Colleges in Crisis: A Systemic Failure

At the Higher Education Inquirer, our concept of the College Meltdown describes a long-term decline marked by falling enrollment, rising costs, debt peonage, and declining academic labor conditions:

  • Enrollment has been falling since 2011, with sharp declines in community colleges and regional publics.

  • Student debt has exploded, with minimal returns for many graduates.

  • Academic labor is being deskilled, with "robocolleges" relying on underpaid, non-tenure-track staff or automated instruction.

  • State funding is shrinking, as aging populations drive up Medicaid costs and crowd out investment in public higher education.

Enter the Trump Administration (2025)

The return of Donald Trump to the presidency in 2025 has further accelerated the higher ed crisis. His administration is now actively contributing to the system’s unraveling:

Deregulation and Predatory Practices

Trump’s Department of Education is dismantling federal oversight of for-profit colleges, weakening gainful employment protections and allowing discredited institutions back into the federal aid system. This benefits subprime colleges that trap students in cycles of debt.

Political Weaponization of Higher Ed

Trump-aligned state governments and federal agencies are targeting DEI initiatives, restricting academic freedom, and enforcing ideological conformity. Public colleges are increasingly being used to wage cultural wars.

Funding Cuts and Favoritism

Funding is being diverted from public institutions toward private religious colleges and corporate-friendly training programs. Meanwhile, community colleges and regional universities are being left to die on the vine.

Undermining Debt Relief

Efforts to reform or forgive student loans have been stalled or reversed. Borrowers are left stranded in opaque systems, while private loans surge in popularity—often with worse terms and even less accountability.

A Best-Case vs. Worst-Case Future

When asked what the next few years could look like, I offered a fork in the road:

Best case: Colleges become transparent, accountable, and aligned with the public good, confronting crises like climate change, inequality, and authoritarianism.

Worst case: Colleges become entrenched ideological battlegrounds, deepening inequality and social fragmentation. The educated underclass grows, and higher education becomes an engine of despair rather than mobility.

Conclusion

The College Meltdown is not a singular event—it is a long-term systemic crisis. Under the combined forces of privatization, political polarization, and demographic stress, U.S. higher education is being hollowed out.

As colleges pick sides in a broader culture war, the public mission of higher education is being sacrificed. The working class and the educated underclass are the casualties of a system that promised prosperity but delivered precarity.

In this volatile moment, the future of American higher education may well mirror the broader American crisis: one defined by deepening divides, fraying institutions, and a desperate need for accountability, justice, and reinvention.





Friday, April 4, 2025

HEI's Public Comment to ED Regarding Public Service Loan Forgiveness, Pay As You Earn, Income Contingent Repayment, Gainful Employment, Borrower Defense to Repayment and Other Rules and Regulations

[Editor's note: We are asking Higher Education Inquirer readers to submit their public comments regarding the Department of Education's plan to eliminate student loan forgiveness and income-based repayment programs. You can submit your comments here.]

As a publication committed to covering critical issues in the higher education landscape, we at the Higher Education Inquirer wish to express our full support for federal student loan forgiveness and repayment programs, such as Public Service Loan Forgiveness (PSLF), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR) programs. These programs play an essential role in ensuring equitable access to higher education, supporting public servants, and empowering graduates to contribute meaningfully to their communities and the economy.

With the rising cost of higher education, many students are burdened with overwhelming debt that limits their financial freedom and career choices. PSLF, PAYE, and ICR offer vital pathways for loan repayment and forgiveness, particularly for individuals working in essential public service fields or pursuing careers with modest salaries. By providing these programs, the federal government ensures that public servants, teachers, social workers, healthcare professionals, and other essential workers can focus on their vocations without the paralyzing weight of unmanageable student loan debt.

Public Service Loan Forgiveness, for example, offers a critical incentive to individuals who dedicate themselves to public service careers, enabling them to receive loan forgiveness after ten years of qualifying payments. This program not only supports individuals but also ensures that important sectors such as education, healthcare, and nonprofit organizations continue to attract passionate and committed professionals. It is a win-win for both the workers and the communities they serve.

Furthermore, income-driven repayment programs like PAYE and ICR allow borrowers to repay their loans based on their income and family size, providing a more sustainable and manageable path to loan repayment. These programs have proven particularly effective in reducing defaults, helping borrowers stay current on their payments without compromising their quality of life.

In addition to supporting these repayment and forgiveness programs, we also urge stronger regulatory protections for students to ensure that they are not misled by predatory institutions that prey on their aspirations. The enforcement of stronger Gainful Employment regulations is necessary to ensure that educational programs lead to viable career opportunities with reasonable earnings potential. This is especially important for students who enroll in for-profit institutions that often promise high-paying jobs but fail to deliver adequate outcomes. Without such protections, students may find themselves saddled with debt and little to no ability to repay it.

Equally important is the Borrower Defense to Repayment program, which offers a critical safeguard for borrowers who have been misled or defrauded by institutions. Strengthening this program and ensuring its accessibility is essential for protecting students from predatory practices that exploit their financial futures. The government must continue to offer these borrowers a clear and fair path to debt relief, allowing them to move forward without the burden of loans incurred due to false or misleading claims made by their schools.

We believe that these initiatives, in tandem with loan forgiveness programs, are essential for the continued prosperity of our nation. By alleviating the financial burden of student loans, promoting stronger accountability in higher education, and supporting those who dedicate themselves to public service, we can ensure that more graduates have the opportunity to thrive in their careers and make meaningful contributions to society.

At the Higher Education Inquirer, we encourage policymakers to protect, enhance, and expand these vital programs to support a diverse range of students and professionals. We look forward to working alongside others in the higher education community to ensure that students are not held back by the weight of insurmountable student loan debt, but are empowered to pursue their dreams and make a positive impact on society.

Thank you for your attention to this important matter.

Sincerely,

Dahn Shaulis
Senior Editor
Higher Education Inquirer

Monday, March 31, 2025

March Update on Student Debt (Debt Collective)

The federal government is a sh*t show right now. From ICE abductions of pro-Palestine college students to proposed cuts to Social Security and Medicaid, the Trump administration is wreaking havoc on all of our communities.

We want to take a moment and specifically talk about student debt and higher education — work that we’ve been doing for a while now. Here’s some of what we know, what we think, and what we should do:

In recent days, the Trump administration issued an executive order to dismantle the Department of Education. Legally, this cannot be done without Congress, but in practice, this means most of the staff was simply fired. We talked a little bit about what that means for student debtors in this Twitter thread. In short, this makes the student debt crisis much worse.

Shortly after that, Trump ordered the entire federal student debt portfolio — all $1.7 trillion — to be moved from the Department of Education to the Small Business Administration (SBA). The Small Business Administration is another agency within the federal government. That means our collective creditor would still be the federal government. But will this move actually happen? Will our federal student loans somehow end up privatized? There is a LOT up in the air right now, and the short answer is we don’t know exactly what will happen, but we as debtors should remain nimble so we can exercise our collective power when we need to. Moving our student debt from the Department of Education to the SBA would be 1) illegal 2) administratively and practically difficult 3) lead to possible errors with your account.

If you haven’t already, we still highly recommend going to studentaid.gov and finding your loan details and downloading and/or screenshotting your history.

The traditional infrastructure we have long suggested debtors utilize to solve problems with their student debt — the Consumer Financial Protection Bureau (CFPB), the FSA ombudsman team, etc — have either been undermined or outright destroyed. This means there are fewer and fewer ways for us, student debtors, to get answers to problems with our student debt accounts. But we shouldn’t let Congress off the hook — we should make student loans Congress’ problem. They’re elected to serve us and it’s their job to attend to your needs.

Our friends at Student Borrower Protection Center (SBPC) have put together a helpful tool to open a case at your member of Congress’s office.

Lastly, we want to talk about what we mean when we say Free College. Student debt has ruined lives, and will continue to as long as it exists. We shouldn’t have to borrow to pay for college — in fact, we shouldn’t have to pay at all. It should be free. And that’s what we’re fighting for. But our vision for College For All doesn’t stop at tuition-free — it means ICE and cops off campus; it means paying workers, faculty and staff a living wage; it means standing up for free speech; it means ending domestic and gender based violence on campus; and it means universities that function as laboratories for democracy and learning, not as laboratories for landlords and imperialism.

On April 17th, Debt Collective is co-sponsoring the National Higher Education Day of Action to demand our vision of College For All and oppose the hell the Trump administration is causing right now. Find an event near you HERE to participate — or start an event on your own!

And THIS SATURDAY – April 5th –we’re taking to the streets with hundreds of thousands of people across the country to tell Trump and Musk “Hands Off Our Democracy!” They’re stripping America for parts, and it's up to us to put an end to their brazen power grab. This will be one of the largest mass mobilizations in recent history — and we need you in the streets with us. There are hundreds of actions planned, find one to join near you HERE.

Whatever happens in the future, we will be more likely to win if we gird ourselves with each other’s stories and experiences so we can fight together. This is why we built a debtors’ union — the only virtual factory floor for debtors. Debt acts as a discipline and keeps people from joining the struggle for things we care about — but we can increase our numbers and build power by canceling unjust debts. We all share the same creditor and we need to stay connected to one another. Forward this email to a friend or family member and tell them to join the union and our email list so we can stay connected.

In Solidarity,

Debt Collective

Saturday, March 29, 2025

CBO's Revised Student Loan Projections and FSA Operational Costs (Glen McGhee)

The Congressional Budget Office (CBO) has dramatically revised its projections for the federal student loan program, transforming what was once expected to be a profitable government investment into a significant fiscal liability. This report examines the details of these projection changes and analyzes the operational costs of the Federal Student Aid (FSA) program.

The CBO's updated budget projections released in 2024 reveal a stark shift in the expected financial performance of the federal student loan program. These projections represent a significant revision from earlier expectations and highlight growing concerns about the sustainability of current student lending policies.
According to the Committee for a Responsible Federal Budget (CRFB), the estimated federal cost of student loans issued between 2015 and 2024 has increased by $340 billion – transforming from a projected gain of $135 billion in the 2014 baseline to an expected loss of $205 billion in the 2024 baseline15. This represents a complete reversal in the financial outlook for the program over the past decade.
This dramatic shift is particularly evident when examining the changing projections for specific loan cohorts. In 2014, the CBO projected that taxpayers would generate an 11-cent profit for every dollar of student loans issued by the federal government in fiscal year 2024. However, the most recent projections indicate that taxpayers will instead incur a 20-cent loss per dollar of loans issued this fiscal year6.
Looking ahead, the situation appears even more concerning. Over the 2024-2034 budget window, the CBO expects federal student loans to cost taxpayers $393 billion1. This amount exceeds the $355 billion CBO expects to be spent on Pell Grants, the flagship college aid program for low-income students, over the same time period1.
The projected $393 billion cost includes several components:
  • $221 billion in losses on the $1.1 trillion in student loans the federal government will issue during this period
  • $140 billion in re-estimates of the losses taxpayers will bear on outstanding loans
  • $34 billion toward administering the student loan programs6
One particularly concerning aspect of the CBO projections is the growing cost of graduate student loans. These loans are expected to make up around half of new student loans originated in the current fiscal year11. The CBO projects that taxpayers will lose $102 billion on lending to graduate students over the coming decade11. According to the CRFB, graduate school loans are now nearly as subsidized as undergraduate loans and make up half of the cost of newly issued student loans15.
The dramatic increase in projected costs has several primary causes, as identified in the CBO reports and analyses by financial experts.
The primary catalyst for the growing losses is the expansion and increased utilization of income-driven repayment (IDR) plans6. While a borrower repaying loans under a traditional fixed-term repayment plan typically repays more than the initial amount borrowed, a typical borrower using an IDR plan will repay significantly less than the original loan amount6.
The CBO projects that taxpayers will lose between 30 and 48 cents for every dollar in federal student loans issued in fiscal year 2024 and repaid on an IDR plan1. Preston Cooper notes in his LinkedIn post that "the role of IDR plans in driving these costs can't be overstated. CBO generally expects taxpayers to profit on loans repaid through traditional fixed-term repayment plans. But loans repaid on IDR plans will incur losses ranging from 30 to 48 cents on the dollar"1.
The Biden administration's student loan forgiveness initiatives are cited as significant contributors to the growing cost of the program. The House Budget Committee press release states that "$140 billion or over a third of this cost directly stems from President Biden's student loan forgiveness schemes"7. These initiatives include changes to income-driven repayment plans to make them more generous1.
Beyond the projected losses on the loans themselves, the Federal Student Aid (FSA) program incurs significant operational costs to administer federal student aid programs.
According to FSA's 2024 annual report, the agency operated on an annual administrative budget of approximately $2.1 billion during FY 20244. As of September 30, 2024, FSA was staffed by 1,444 full-time employees who are primarily based in FSA's headquarters in Washington, DC, with additional staff in 10 regional offices throughout the country4.
The Department of Education's Salaries and Expenses Overview provides additional insight into how these administrative funds are allocated. The Student Aid Administration account consists of two primary components:
  1. Salaries and Expenses
  2. Servicing Activities
In the fiscal year 2020 budget request, for example, the Student Aid Administration account totaled $1,812,000,000, with $1,281,281,000 allocated for Salaries and Expenses and $530,719,000 for Servicing Activities5.
The latest CBO projections highlight a dramatic shift in the financial outlook for the federal student loan program. What was once projected to be a profitable government investment has transformed into a significant fiscal liability, with taxpayers expected to lose hundreds of billions of dollars over the next decade.
This transformation raises important questions about the sustainability of current policies and the potential need for reforms to address growing costs. The substantial operational budget of FSA ($2.1 billion annually) adds to the overall fiscal impact of federal student aid programs.
As policymakers consider the future of federal student aid, they will need to grapple with balancing access to higher education with fiscal responsibility and ensuring that federal resources are allocated efficiently and effectively.
Citations:
  1. https://www.linkedin.com/posts/preston-cooper-479331a4_the-congressional-budget-office-cbo-released-activity-7209166019871809536-8vM2
  2. https://www.farmers.gov/sites/default/files/2021-10/usda-farmloans-factsheet-10-20-2021.pdf
  3. https://www.cbo.gov/publication/59499
  4. https://studentaid.gov/sites/default/files/fy2024-fsa-annual-report.pdf
  5. https://www.ed.gov/media/document/w-seoverviewpdf-39165.pdf
  6. https://www.forbes.com/sites/prestoncooper2/2024/06/19/cbo-cost-of-federal-student-loans-nears-400-billion/
  7. https://budget.house.gov/press-release/via-forbes-cbo-cost-of-federal-student-loans-nears-400-billion
  8. https://www.fsa.usda.gov/resources/programs/farm-operating-loans
  9. https://www.opm.gov/healthcare-insurance/flexible-spending-accounts/
  10. https://crsreports.congress.gov/product/pdf/R/R46143
  11. https://edworkforce.house.gov/uploadedfiles/2.5.25_cooper_testimony_house_ed_and_workforce_final.pdf
  12. https://studentaid.gov/data-center/student/portfolio
  13. https://www.agcredit.net/loans/beginning-farmer-loans/fsa-loans
  14. https://www.oklahomafarmreport.com/okfr/2025/01/07/usda-increases-funding-for-new-specialty-crop-program-reminds-producers-of-upcoming-deadlines/
  15. https://www.crfb.org/blogs/student-loans-cost-340-billion-more-expected
  16. https://farmdoc.illinois.edu/wp-content/uploads/2022/09/USDA-FSA-Your-Guide-to-Farm-Loans.pdf
  17. https://www.cbo.gov/publication/59946
  18. https://gaswcc.georgia.gov/document/document/microloans-fact-sheet-aug-2019/download
  19. https://www.cbo.gov/publication/60682
  20. https://www.farmraise.com/blog/fsa-loan-types
  21. https://www.cbo.gov/publication/60713
  22. https://www.fsa.usda.gov/programs-and-services/farm-loan-programs/farm-operating-loans
  23. https://www.cato.org/briefing-paper/ending-federal-student-loans
  24. https://fsapartners.ed.gov/knowledge-center/fsa-handbook/2022-2023/vol3/ch2-cost-attendance-budget
  25. https://www.congress.gov/crs-product/R43571
  26. https://fsapartners.ed.gov/knowledge-center/fsa-handbook/2023-2024/vol3/ch2-cost-attendance-budget
  27. https://sustainableagriculture.net/publications/grassrootsguide/credit-crop-insurance/direct-and-guaranteed-farm-loans/
  28. https://www.ed.gov/sites/ed/files/about/overview/budget/budget24/summary/24summary.pdf
  29. https://studentaid.gov/sites/default/files/fy2023-fsa-annual-report.pdf
  30. https://bipartisanpolicy.org/explainer/federal-student-aid-an-overview/
  31. https://www.ed.gov/about/ed-organization/functional-statements/fsa-functional-statements/finance
  32. https://www.pgpf.org/our-national-debt/
  33. https://www.cbo.gov/publication/60419
  34. https://www.mercatus.org/research/data-visualizations/cbo-export-import-bank-fha-mortgage-guarantees-and-doed-student-loan
  35. https://www.crfb.org/papers/analysis-cbos-march-2024-long-term-budget-outlook

Friday, March 28, 2025

Higher Education Inquirer continues to follow IPO/sale of University of Phoenix

On March 6, 2025, Apollo and Vistria publicly announced a possible IPO or sale of the University of Phoenix.  These companies have been trying to sell the University of Phoenix since 2021, but there have been no takers. The owners claim the school is worth $1.5B to $1.7B, but we (and experts we know) are skeptical, given the financials we have seen so far. The University of Phoenix was previously on sale for about $500M-$700M but the University of Arkansas System, the State of Idaho, and apparently other colleges declined the offers. 

The University of Phoenix offers subprime education to folks, historically targeting servicemembers, veterans, and people of color. While some students may profit from these robocollege credentials, one wonders what these workers actually learn. The current student-teacher ratio at the University of Phoenix, according to the US Department of Education, is 132 to 1.   

The University of Phoenix has faced a number of scandalssometimes getting away with no penalty, and other times paying large fines.  

In 2023 we made a Freedom of Action (FOIA) request to the US Department of Education (ED) to get Phoenix's most recent audited financials. In March 2025, more than 20 months later, we were provided with a 35-page report, audited by Deloitte, with numbers from 2021 and 2022. 




This month the Higher Education Inquirer followed up with a Freedom of Information request with the ED to obtain more up-to-date financial numbers for the University of Phoenix. We hope they will be responsive and timely enough to get the word out to the public.   

Borrower Defense Case Goes to US Supreme Court. How will it decide?

On January 10, 2025, the U.S. Supreme Court granted the Department of Education’s petition for a writ of certiorari to review the U.S. Court of Appeals for the Fifth Circuit’s decision in Career Colleges and Schools of Texas v. Department of Education. The Fifth Circuit had preliminarily enjoined the 2022 Borrower Defense to Repayment (BDR) final rule on a nationwide basis. This rule, published on November 1, 2022 (87 Fed. Reg. 65,904), is a key component of the Biden administration’s broader student loan forgiveness efforts.

The Supreme Court’s review will focus on one pivotal question: whether the court of appeals erred in holding that the Higher Education Act does not permit the assessment of borrower defenses to repayment before default, in administrative proceedings, or on a group basis. Notably, the Court will not address the second question posed by the Department: whether the appeals court erred in ordering the district court to grant preliminary relief on a universal basis.

Background and Legal Battle

The lawsuit originated on February 28, 2023, when the Career Colleges and Schools of Texas (CCST) filed in the United States District Court for the Northern District of Texas. CCST sought to enjoin and vacate the 2022 BDR rule, arguing that it creates unlawful processes, serves no legitimate purpose under the Higher Education Act, and constitutes executive overreach by the Biden administration, violating the Department’s statutory authority and the Constitution’s separation of powers.

After the U.S. District Court for the Western District of Texas denied the preliminary injunction, CCST pursued an interlocutory appeal to the Fifth Circuit. On April 4, 2024, the Fifth Circuit overturned the lower court’s decision and, despite the Department’s objections, postponed the effective date of the 2022 BDR rule pending final judgment. The Department’s petition for rehearing was denied, prompting its appeal to the Supreme Court.

What’s at Stake

The Supreme Court’s decision will likely have significant consequences for both borrowers and institutions. If the Court rules against the Department of Education, it could severely limit the scope of borrower defense claims, especially on a group basis, making it harder for defrauded students to receive relief. For-profit colleges and other institutions might feel emboldened to challenge similar regulations and forgiveness measures.

A ruling in favor of the Department, while seemingly less likely given the Court’s conservative majority, would affirm the Biden administration’s approach to processing borrower defenses and may secure loan forgiveness for thousands of borrowers who attended predatory institutions.

The Political Dimension

The timing of this case is crucial. Just days before the Supreme Court granted certiorari, the Biden administration announced the cancellation of loans for 150,000 borrowers—most of which were through the borrower defense process. Shortly afterward, additional forgiveness for income-based repayment plan borrowers and individual borrower defense approvals was announced. However, the future of these forgiveness efforts remains uncertain, as the second Trump administration has signaled intentions to rollback or revise Biden’s loan forgiveness policies.

A Conservative Court’s Approach to Executive Power

Given the Supreme Court’s current composition and its recent track record in cases like West Virginia v. EPA, it seems likely that the justices will scrutinize the executive authority wielded in crafting the BDR rule. The conservative majority may favor a narrow interpretation of the Higher Education Act, signaling that large-scale forgiveness should come from Congress rather than executive agencies.

Conclusion

The Supreme Court’s ruling on the 2022 BDR rule will set a precedent that could define the future of student debt relief and the Department of Education’s authority. For borrowers hoping for widespread relief, the outcome could mean the difference between long-awaited forgiveness and a protracted legal battle. For institutions, particularly for-profits, a ruling against the Department could bolster their resistance to accountability measures.

Thursday, March 27, 2025

Potential Title IV Disruption Catastrophic (Glen McGhee)

Impact of Department of Education Dismantlement on Higher Education Act Programs

On March 20, 2025, President Trump signed an executive order to begin dismantling the Department of Education, a move that threatens to create significant upheaval across higher education's federal support system. While the order cannot immediately eliminate the department without congressional approval, it has already resulted in substantial workforce reductions and signals major changes ahead for the administration of federal education programs 1.
Title IV: The Most Vulnerable and Consequential Program
Among all eight titles of the Higher Education Act (HEA), Title IV federal student aid programs would create the most severe upheaval for the higher education sector if destabilized through the Department of Education's dismantling. Title IV represents the foundation of federal financial support for higher education, administering approximately $111.6 billion in financial assistance to 9.8 million students in FY202211. This massive program encompasses Pell Grants, federal student loans, and work-study opportunities that directly enable student access and persistence.
Financial Impact Scale
The sheer financial magnitude of Title IV makes its disruption particularly consequential. In 2021 alone, 10.5 million students received $125 billion in federal student aid through the Department of Education15. Title IV's Office of Federal Student Aid received the largest departmental budget allocation - over $68 billion, with $20 billion promised for distribution during 20254. This represents the largest financial relationship between the federal government and higher education institutions.
Enrollment Consequences Already Evident
Even small disruptions to Title IV administration have already demonstrated severe enrollment impacts. Recent problems with the Free Application for Federal Student Aid (FAFSA) system implementation led to measurable enrollment declines:
  • 43% of private institutions reported smaller freshman classes
  • 27% noted fewer financial aid recipients
  • 18% reported decreased racial or ethnic diversity in incoming students2
These enrollment impacts disproportionately affect disadvantaged student populations. The FAFSA completion rates dropped nearly 10%, showing how administrative dysfunction can directly reduce educational access2.
Complex Regulatory Framework
Title IV administration involves an extraordinarily complex regulatory structure that would be challenging to transfer or maintain during a departmental transition. The program includes more than 300 pages of regulations, with significant compliance requirements for institutions6. Recent rule changes have created new financial responsibility, administrative capability and certification requirements applicable to institutions participating in Title IV programs7.
Presidential Assurances vs. Implementation Reality
While President Trump has indicated that essential functions like Pell Grants, Title I funding, and programs for students with disabilities would be "fully maintained and redistributed to various other agencies and departments," the implementation details remain unclear18. The executive order instructs Education Secretary Linda McMahon to "undertake all necessary actions to facilitate the dissolution" while ensuring continuous provision of services8.
However, the Department's workforce has already been reduced from over 4,000 to approximately 2,000 employees through layoffs and voluntary resignations14. This reduction in administrative capacity raises serious questions about the continuity of Title IV program implementation.
Other HEA Titles: Significant but Less Catastrophic Impact
While all HEA titles would face disruption through departmental dismantling, Title IV's combination of massive funding scale, direct impact on enrollments, and regulatory complexity makes its destabilization particularly consequential.
Other HEA titles, while important, would not create the same level of immediate financial and enrollment chaos:
  • Title I: Provides general provisions and administrative requirements, but lacks direct funding mechanisms
  • Title II: Supports teacher preparation programs, but with significantly smaller funding scales
  • Title III: Provides institutional aid for minority-serving institutions, representing important but more targeted support
  • Titles V-VIII: Offer specialized program support for specific institutional types or educational priorities
Conclusion
The dismantling of the Department of Education threatens all federal higher education programs, but Title IV student aid programs represent the most consequential area for potential upheaval. The scale of financial support, direct impact on enrollment and access, complexity of administration, and early evidence from FAFSA disruptions all indicate that Title IV destabilization would produce the most severe consequences for higher education institutions and students.
While the administration has promised to maintain essential functions, the mechanisms for doing so remain unclear, and the significant reduction in departmental workforce suggests potential administrative challenges ahead. The higher education community must closely monitor this transition to ensure that critical student financial support systems remain functional during this unprecedented departmental restructuring.
Citations:
  1. https://thehill.com/homenews/education/5179987-trump-executive-order-department-of-education-linda-mcmahon/
  2. https://www.insightintodiversity.com/fafsa-issues-led-to-decreased-enrollment/
  3. https://www.everycrsreport.com/reports/IF12780.html
  4. https://onwardstate.com/2025/03/20/how-the-dismantling-of-the-department-of-education-will-affect-college-students-across-the-nation/
  5. https://www.levyinstitute.org/pubs/rpr_2_6.pdf
  6. https://imprimis.hillsdale.edu/the-crisis-and-politics-of-higher-education/
  7. https://www.faegredrinker.com/en/insights/publications/2024/2/significant-new-financial-responsibility-administrative-capability-and-certification-requirements-loom-ahead-for-title-iv-institutions
  8. https://www.nbcnews.com/politics/trump-administration/education-department-trump-what-is-next-student-loans-fafsa-rcna197302
  9. https://www.startribune.com/trump-orders-a-plan-to-dismantle-the-education-department-while-keeping-some-core-functions/601240066
  10. https://www.nbcnews.com/news/education/dozens-colleges-see-fafsa-turmoils-impact-freshman-classes-rcna167342
  11. https://sgp.fas.org/crs/misc/R43351.pdf
  12. https://www.asugsvsummit.com/video/preview-of-the-great-upheaval-higher-educations-past-present-and-uncertain-future
  13. https://www.cnn.com/2025/03/20/politics/dismantling-department-of-education-trump/index.html
  14. https://www.insidehighered.com/news/government/student-aid-policy/2024/11/04/what-abolishing-education-department-could-mean
  15. https://campuscafesoftware.com/title-iv-student-financial-aid-guide/
  16. https://www.insidehighered.com/news/government/student-aid-policy/2025/03/13/how-education-department-layoffs-could-affect-higher
  17. https://www.insidehighered.com/news/government/student-aid-policy/2024/11/14/future-financial-aid-under-trump
  18. https://www.latimes.com/world-nation/story/2025-03-19/trump-to-order-a-plan-to-shut-down-the-us-education-department
  19. https://www.insidehighered.com/news/admissions/traditional-age/2024/10/23/after-fafsa-issues-steep-drop-first-year-enrollment
  20. https://fsapartners.ed.gov/knowledge-center/fsa-handbook/2020-2021/appendices/appx-g-higher-education-act-1965-table-contents-august-26-2020
  21. https://www.nasfaa.org/news-item/35894/Trump_Signs_Executive_Order_Seeking_to_Dismantle_ED
  22. https://www.nasfaa.org/news-item/35508/ED_Title_IV_Student_Aid_Exempt_From_White_House_Pause_on_Federal_Grants_and_Loans
  23. https://www.nea.org/nea-today/all-news-articles/how-dismantling-department-education-would-harm-students
  24. https://www.carnegiehighered.com/blog/fafsa-delays-impact-2024-enrollment/
  25. https://fsapartners.ed.gov/knowledge-center/library/functional-area/Overview%20of%20Title%20IV
  26. https://www.insidehighered.com/news/government/student-aid-policy/2025/02/07/five-ways-education-department-impacts-higher-ed
  27. https://www.usatoday.com/story/news/politics/2025/03/12/education-department-cuts-student-loan-fafsa-iep-impact/82310137007/
  28. https://www.cbsnews.com/news/trump-fafsa-student-loans-what-does-the-department-of-education-do/
  29. https://www.foxsports.com/stories/nfl/dallas-cowboys-free-agency-draft-2025
  30. https://www.washingtonpost.com/business/2024/06/22/gen-z-millennials-debt-inflation/
  31. https://help.studentclearinghouse.org/compliancecentral/knowledge-base/gainful-employment-financial-value-transparency-faqs/
  32. https://19thnews.org/2025/03/trump-executive-order-department-of-education/
  33. https://www.ctpost.com/news/education/article/bridgeport-school-superintendent-search-20230032.php
  34. https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2024-06-20/implementation-gainful-employment-funding-metric-requirements-institutions-under-administrative-capability-and-financial-responsibility
  35. https://crsreports.congress.gov/product/pdf/R/R43159
  36. https://www.bestcolleges.com/news/trump-wants-to-end-education-department-what-does-that-mean-for-financial-aid/