The Financial Aid System Is Changing. Here’s What College Students Need to Know
Credit: The National Association of Student Financial Aid Administrators- The financial aid system may be in the beginning stages of significant change.
- It’ll be incumbent upon financial aid administrators to work with students to understand these changes.
- The rise of artificial intelligence may also introduce new solutions and obstacles for financial aid.
- Nonetheless, there are reasons to remain optimistic about the future of financial aid.
2025 promises to be a watershed year for the federal financial aid system.
President Donald Trump and lawmakers have offered a slew of proposals that would reshape many aspects of federal financial aid, including proposed changes to Pell Grant eligibility. At the same time, new technologies like artificial intelligence and chatbots are finding their way into day-to-day operations at financial aid administration offices across the country.
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BestColleges spoke with Melanie Storey, the newly appointed CEO and president of the National Association of Student Financial Aid Administrators (NASFAA), to understand what these changes mean for students.
Storey previously served as director of policy implementation and oversight at the Office of Federal Student Aid (FSA). There, she helped oversee the rollout of the “Simplified” Free Application for Federal Student Aid (FAFSA) form in late 2023.
BestColleges: How would you describe the current feeling among financial aid administrators?
Melanie Storey: In a single word, maybe “anxious.”
The last five years have been pretty unrelenting for financial aid professionals. It started with COVID-19 and having to figure out how to pivot and support students remotely.
It wasn’t long after that the implementation of the FAFSA Simplification Act — which is well documented in its challenges — was a uniquely difficult time for our industry. Now we’re looking at significant changes coming from the administration. Not just at the administration level, but, more importantly, driven by Congress through the reconciliation process.
There is understandable angst among financial aid administrators that this will be a more significant change for them to manage, both from a technology and systems perspective, but also to explain [these changes] to students and families and help them navigate.
BC: How confident should students be in the financial aid system and their administrators?
MS: If you are a student who is not yet enrolled and is thinking “Is [financial aid] even going to be available to me?” I encourage you to be patient. Implementation [of proposed changes] is likely a year or more away.
If you’re a currently enrolled student, again, the timeline is relatively long. You can be relatively confident that aid will be available to you. Will it be the same aid in the same format? That’s unclear.
If you are about to finish your time in higher education, I encourage you to watch closely because a lot of the changes we’re seeing are going to be in the repayment of loans.
BC: How can students build a beneficial relationship with financial aid administrators?
MS: In terms of building a proactive relationship, if you have questions, ask them. Email your financial aid office and try to understand why your award was what it was. Financial aid officers are quite busy, but they have support staff who can help navigate some of those questions.
Aid administrators fundamentally want to help you finance and attend. That’s where their heart is; that’s their mission. If you have questions or concerns, open up those communication lines.
BC: How might downsizing at the Department of Education affect financial aid administration?
MS: When you look at the numbers, the largest part of the department is in federal student aid. So when you see this dramatic reduction in force, it’s hard to imagine how you won’t see impacts on the schools and how they can support students.
[Administrators] take their responsibility as good stewards of taxpayer dollars very seriously, and so they need to have their questions answered … to make sure they are in compliance with all of the rules of participation. When you eliminate significant portions of the staff that support the colleges and universities, that’s going to be hard.
They may genuinely want to make sure they’re doing the right thing, but they can’t get answers.
The full story is still yet to be told.
BC: Will there be a realignment in what financial aid offices do and their purpose?
MS: Financial aid administrators are trying to balance federal, state, and institutional dollars today. We may see that the mix of dollars changes, and we may see the mix of programs change.
But in terms of a dramatic shift in financial aid offices, I think they are constantly evolving.
I do think that the schools are looking for efficiencies to help support students that perhaps give aid administrators more time to focus on compliance issues and counseling issues. We can’t forget that there is this very human part of trying to help students and families understand how to finance [education].
BC: What role might artificial intelligence (AI) play in financial aid?
MS: Students who are looking at colleges and universities now are digital natives in ways we are not.
I think it’s important that colleges and universities, including financial aid officers, meet students where they are and with what they are comfortable using. If you have a question that’s common that can be answered in a meaningfully personal way using technology, I think [AI is] fine and efficient for a financial aid office.
I do think there are limits to it. [Financial aid] is very complicated stuff.
There are standard questions like “What is a Pell Grant?” or “What’s the difference between a subsidized and unsubsidized loan?” Those are things that are repeated over and over again; you probably don’t need to spend staff time on it if you can generate answers with AI, that’s fine.
But as you go through more complicated questions about dramatic family change and addressing that in a financial aid package, now you need a human interaction.
BC: How might cuts at the Institute of Education Sciences (IES) affect financial aid?
MS: Speaking specifically to [the National Center for Education Statistics], they have long run the National Postsecondary Student Aid Study, which allows you to look at the mix of grants and loans and what’s happening to students of various demographics. That helps inform policy-making and policy decisions.
If we’re not monitoring the health of our programs and making sure that we’re targeting them appropriately to meet their purposes, we have a problem.
BC: Is financial aid under attack? Have we lost consensus on this issue?
MS: I think there is a narrative that college is impossible for some people. I don’t want to diminish the strain and the cost and challenge that it is for many students and families, but every year there are millions who are making it happen with the support of [financial aid administrators].
Those stories are powerful and transformational and really inspiring to the families that come behind them. I don’t think we talk as much about that.
If you are an aid administrator working on these programs, you have an archive of powerful stories to tell your state legislators, Congress folks, your campus leaders, [and] your chancellors about why they should value financial aid and support students. The power of those narratives — amongst a lot of noise — is just really powerful.