We've been talking about the changes to financial aid set to take effect this year, and most of the discussion about them has been around the graduate loan caps and the definition of professional programs. However, an often-overlooked portion on how undergraduate loans get sized is the main discussion in this week's issue because I suspect many have not given it the time it deserves or needs before fall semester begins.

Limiting Loans Limits Opportunity

From New Loan Limit Proration Rule Raises Concern Among Financial Aid Experts | Inside Higher Ed

Financial aid officers warn that a lack of guidance from ED is challenging their ability to enact parts of the new financial aid laws.

Our Thoughts

I want you to imagine a college student. Not the typical one portrayed in the media as a fresh from high school eighteen-year-old moving into the residence halls in August. Instead, I want you to picture a single mother. Two kids. She works at a big box store part time. She's going back to college between shifts because she wants to make a better life for herself and her two kids. She's planning to be a teacher. Her name is Joyce. She has some credits from when she started the first time ten years ago and tried to major in education before life got in the way. Although it's hard, she's trying to take 12 credits each semester so she can graduate in 2.5 years. Her boss has even told her that when she gets to student teaching, he'll work with her schedule so she can do that during the day and still work at night and the weekends.

Things are going well for Joyce. She's earning mostly A's with a few B's in her courses, and she's on track to student teach in a year. It's October and she has a night class this semester. Suddenly, the person who's helping care for her kids that one night per week can't due to illness. Joyce tries to find an alternative but comes up short. After discussing her situation with her instructor and advisor, she realizes that she'll have no choice but to withdraw from the course.

Over the course of my career as an advisor (education was one of my majors), I saw a version of Joyce countless times. And while her having to withdraw from that one course is unfortunate, it would not have created much harm toward her progress and certainly would not have impacted her financial aid based upon her positive progress thus far. However, under the new rules for loan limit proration, Joyce has a problem. See, she needs to enroll in 24 credits per year. She only takes 12 per semester so now she has to make up those 3 she just dropped or risk having her loans reduced…the loans she relies on to supplement her income while in school. So, Joyce can either stay enrolled in a course she can no longer attend and thus will not pass; she can try to take 15 credits in the spring or push more credits into her summer plans.

Historically, this type of decision was an academic and student success decision between the student and their advisor. Sure, SAP played a role, but withdrawing from one course usually didn't cause a student not to meet the requirement. Now, there's another thing to consider, but it is largely hidden to the advisor who is often not privy to financial aid packaging. An advisor sitting with Joyce in October can tell her what withdrawing does to her degree plan, whether the course runs again in the spring, and how it affects her sequence. That same advisor cannot tell her what it does to her disbursement, because most advisors have never had access to packaging screens, and there was never much reason to give it to them before now. So, an institution has a couple of options. It can build a way for the advisor to see the aid consequence during the conversation, which is integration work nobody planned for this summer. Or it can send Joyce down the hall to financial aid, which adds a step at exactly the moment when Joyce is already stretched thin and now becomes a potential retention risk in the spring. If I had to guess, many campuses would default to the second option only because it's the easiest path given strained budgets and limited staffing.

So, this leaves Joyce a little stuck, and actually, her situation is perhaps a bit worse than I described it because the Department of Education hasn't fully defined the regulations and procedures for these new rules. ED has not published the schedule of reductions, and nobody can tell her when it happens either, because proration measures against the full academic year and each institution decides for itself whether to adjust the disbursement now or wait to see whether she makes the credits up. Most institutions quoted in the article seem to be waiting (which is probably what I would do), but this means that Joyce goes into the next semester with uncertainty hanging over her. Also, how should her advisor advise her in October?

Of course, the impacts of this new rule will not be felt evenly across the sector. Mid-year withdrawals, part-time enrollment, summer patching, and transfer between institutions all concentrate at community colleges, regional publics, and the adult-serving programs where students like Joyce actually enroll. Sadly, we know those same institutions are often the least resourced and rarely have enough staff to serve the students they have as well as they'd like. And if those institutions are running modular terms or multiple start dates, they have it harder still since full-year proration assumes a fall and spring rhythm that doesn't match those programs.

While you wait for ED to figure it out, please keep students like Joyce on your mind in your campus conversations. Be sure to put the registrar, financial aid, and advising together in a room to ensure they are on the same page about process before the semester starts, so you don't inadvertently decide the process in October when Joyce needs to withdraw from a course. And be sure to document your process. What you decided. Why you decided. Eventually, the guidance from ED will come, and institutions that have documented their reasoning will be in far better shape to negotiate that guidance.

Sparks

• Dueling Mandates (Inside Higher Ed) – Matt Reed asks what colleges are supposed to do when their serve-the-community mandate runs up against the belief that higher education institutions should be run like a business. I make this argument regularly, so it was nice to see it in print.
• When AI Flags a Student in Trouble, Who Is Responsible for What Comes Next? (The EDU Ledger) – With AI being increasingly shoved into educational technology, Walter Hudson explores whether advisors should always be in the loop on deciding next steps for struggling students flagged by AI. As I read this, I was reminded of an article written by an old colleague on the increasing levels of surveillance being introduced under the banner of student success and retention.
• Can we get the next phase of analytics right? (DxED) – Jeremy Anderson, Assistant Vice President & Dean of Analytics and Technology Transformation at Bay Path University, wonders if we can get analytics right as we introduce AI to the mix. He talks about starting with the question, which is a big win in my book on how to design analytics solutions appropriately.