Cases & Developments

The Department of Education (the Department) has published nonpayment rates by institution on the Federal Student Aid Data Center, showing the percentage of borrowers who had entered repayment since January 2020 and were more than 90 days delinquent as of mid-May 2025. This report follows the Department’s efforts in May, 2025 urging Title IV-participating institutions to conduct outreach to former students who had ceased enrollment on or after January 1, 2020 and was part of the Department’s strategy to improve loan repayment outcomes, reduce institutional cohort default rates, and protect schools’ continued eligibility for federal student aid. The report aims to “further assist [that] institutions understand the delinquency/default risks associated with their most-recent borrowers.” The Department notes that institutions are expected to enhance their communication and counseling efforts to mitigate repayment risks and uphold the integrity of Title IV programs. 

U.S. Department of Education Office of Federal Student Aid announced information on the reallocation process of financial aid, availability of the 2024-25 Campus-Based Reallocation Form, and action that institutions need to take to request supplemental funds for the 2025-26 academic year. The 2024-25 Campus-Based Reallocation Form is now available on the Common Origination and Disbursement (COD) website. The announcement instructs institutions to examine their current expenditures under Federal Work-Study (FWS) and/ or Federal Supplemental Educational Opportunity Grant programs (FSEOG) to determine whether there will be any unexpended funds available from 2024-25 allocations. The deadline for when an institution must submit its 2024-2025 Campus-Based Reallocation Form is August 20, 2025 and must be completed if an institution does not intend to spend its entire 2024-25 FWS or FSEOG allocation, or an institution wants to request supplemental 2025-26 FWS funds that will be used only for the purpose of employing students in community service jobs and the school had an FWS fair share shortfall. 

The U.S Department of Education (the Department) announced that it concluded its negotiated rulemaking session to ensure that employers in the Public Service Loan Forgiveness Program (PSLF) are not engaging in activities that have a substantial illegal purpose. The Department made 15 substantive changes to the regulatory language based on feedback from negotiators. The draft regulatory language would amend PSLF and revise the definition of a qualified employer, define activities that have a substantial illegal purpose, establish when a qualifying employer has engaged in activities that have a substantial illegal purpose, address the impact on a borrower’s eligibility for cancellation, and give employers notice and ability to respond to the Department’s findings. The Department explained that illegal activities include: illegal immigration, terrorism, chemical and surgical castration or mutilation of children, child trafficking, illegal discrimination, and a pattern of violating state laws as a threat to our national security and to the social and economic stability of the United States. The Department is now drafting an NPRM for publication in the Federal Register for public comment.  

U.S. Department of Education (the Department) announced that it plans to launch the 2026-27 Free Application for Federal Student Aid (FAFSA) on October 1, 2025, which includes two major improvements. Real-time Identity verification will be available beginning in August, striking the prior 1-3 day waiting period, and a simplified contributor invite process has been introduced, requiring only an email invitation. As a result, parents and guardians no longer need to register on StudentAid.gov or obtain a unique Contributor ID. As part of the rollout, the Department will again conduct a beta-testing phase, during which FAFSA will be made available to a limited number of school districts starting in August 2025, and during which test Institutional Student Information Records (ISIRs) will be sent to colleges. The Department encourages institutions to reach out if any issues occur with the ISIRs in order to improve the rollout.

Dear Colleague Letter (DCL) from the Department of Education Office of Federal Student Aid (FSA) announcing Student Aid Internet Gateway (SAIG) enrollment webinars and additional resources to ease users’ transition to the new system. The webinars are a series of live, instructor-led webinars about new features and functionality coming to FSA Partner Connect in July 2025. Registration is not required, and participation will be available on a first-come, first-served basis, accommodating up to 10,000 attendees in each session. The first webinar is scheduled for June 30, 1-2:30-pm reviewing the Account Access Management Center, with future sessions scheduled to review Enrollment and Management for Systems and Services. Finally, self-paced learning resources will also be available in July, including job aids to walk users through various processes and webinar recordings.  

U.S. Department of Education Office of Federal Student Aid (the Department) announced it will launch a nationwide effort to eliminate identity theft and fraud in federal student aid programs for the fall 2025 semester to protect taxpayers and reduce the administrative burden on colleges and universities. In the interim, the Department will require institutions of higher education to validate the identity of certain first-time applicants who are enrolled in the summer term to prevent identity theft fraud. The Department expects the number of students requiring identity validation during the summer to be relatively low, and will implement a permanent screening process for each FAFSA applicant. The Department shared that since investing in and focusing on fraud detection efforts, it has identified almost 150,000 suspect identities in current FAFSA forms, and those applicants will be marked for required live identity verification by schools before aid can be disbursed. Finally, as part of the fraud prevention effort, the Department will be making changes to the acceptable documentation for identity validation, noting that an applicant must present, either in person or on a live video conference, an unexpired, valid, government issued photo identification to an institutionally authorized individual and the institution must preserve a copy of the documentation. Guidance on the new required processes can be found here.