Cases & Developments

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.  

Order and Final Judgment Permanently Enjoining Defendants. Plaintiff, the United States of America, brought suit against the State of Texas alleging that the Texas Education Code allows people who are not lawfully present in the United States to qualify for reduced tuition at public state colleges. Plaintiff contends that such action is prohibited by federal law and asked the Court to permanently enjoin the enforcement of certain provisions of the Texas Education Code that it asserts are in conflict with federal immigration law. Plaintiff maintains that since 2001, Texas law has allowed undocumented migrants who establish residency in Texas to benefit from reduced, in-state tuition rates while denying the same benefit to U.S. citizens who are not residents of Texas through the Texas Dream Act. Plaintiff alleged that defendant violated the supremacy clause as it expressly violates federal immigration law’s prohibition on providing postsecondary education benefits based on residency. Within the same day of plaintiff filing its complaint, the Court ruled in plaintiff’s favor permanently enjoining defendant from enforcing the Texas Education Code as applied to aliens who are not lawfully present in the United States. 

U.S. Department of Education (the Department) announced plans to address fraud in student aid after a recent comprehensive analysis found “nearly $90 million disbursed to ineligible recipients.” The Department plans to (1) strengthen real-time data-sharing with the Social Security Administration to prevent identity theft and avoid erroneous distribution to deceased individuals; (2) gain additional specificity on student status from the Department of Homeland Security (DHS) to prevent disbursement to individuals granted immigration parole status (individuals who are not immediately eligible for student aid); (3) resume National Student Loan Database System post screening for the 2024-25 and 2025-26 FAFSA cycles to ensure that students only access aid they are eligible to receive; and (4) use data models to flag applications with suspicious or inconsistent information to identify individuals suspected of using someone else’s identity to complete FAFSA forms.  

NACUA’s new Practice Guide on Race Conscious Scholarships and Financial Aid. The Practice Guide reviews the necessary steps postsecondary institutions should take to verify that financial aid awards and scholarships are structured and administered in a race-neutral manner in light of heightened scrutiny accompanying changes in the legality of race-based affirmative action in admissions. It provides a primer on the relevant legal and regulatory background and reviews methods for navigating existing restricted scholarships, such as “pool and match” methodology. NACUA thanks its Saul Ewing members Josh Richards, Amy Piccola, and Matt Reinhart for their assistance in preparing this Practice Guide on Race Conscious Scholarships and Financial Aid.  

U.S. Department of Education Office of Federal Student Aid (the Department) announced the extension of flexibilities for late disbursements to all students who filed a FAFSA form for the 2024-25 award year who were or are impacted by a known issue announced by the Department, which prevented their official Student Aid Index (SAI) from being calculated by the FAFSA Processing System (FPS) prior to the end of their enrollment. The Department shared that it is aware of the ongoing FPS issues, stating that in some cases, records with a reject code can be resolved by the applicant or the school, but if both are blocked from resolving the issue and thus from obtaining an official SAI by the known system issue, they should “document the issue in the student’s file and wait for a resolution from the Department” while the Department works to implement permanent fixes for the issues. It also encouraged institutions to “utilize the additional flexibilities provided … to award … aid and make late disbursements to students who would have otherwise been eligible to receive Title IV funds prior to the end of their enrollment.”