Students Negatively Impacted by Strained Financial Aid Offices


Contact: Haley Chitty
Director of Communications
(202) 785-6959 

Washington, DC – February 7, 2011 - Financial aid offices and the student services they provide are being strained by increasing regulatory and administrative burdens, according to a recent survey by the National Association of Student Financial Aid Administrators (NASFAA).

The survey—fielded in October 2010—demonstrated that 9 in 10 of the more than 1,000 responding NASFAA members reported having fewer resources to dedicate to critical student services that promote college access, success, and successful student loan repayment. Services feeling the pinch included face-to-face counseling, extra attention for target student populations and outreach efforts.

A majority of survey respondents cited a greater regulatory/compliance workload as a major cause of the resource shortage. These findings align with a recent NASFAA review of student aid regulatory language, which found a 40 percent increase (in word count) of the federal regulations governing the student aid programs over the last decade.

“At some point, we must stop and ask to what extent federal regulations and requirements are either hindering college access and success or increasing costs for students – as schools are forced to increase tuition to hire staff to keep up with new requirements,” said NASFAA President Justin Draeger.

Other factors that are straining financial aid office resources include:

  • Greater numbers of aid applicants
  • More applicants needing their application to be updated due to changes in family finances
  • More applications needing to be verified
  • Compliance with new, complex year-round Pell Grant regulations
  • New regulations that are unrelated to the student aid programs

As a result, two in three survey respondents said that their financial aid office was facing a “moderate” or “severe” resource shortage; approximately 80 percent who are facing a shortage indicated that these are permanent (not short-term) shortages.

To alleviate the resource shortage most financial aid offices are experiencing, NASFAA recommends:

  • Streamlining student aid programs—by consolidating current programs into one grant program, one loan program, and one campus-based program.
  • Streamlining the student aid application processes—to eliminate hurdles low-income students continue to face when applying for and receiving financial aid.
  • Eliminating regulations that are duplicative and that don’t apply to student aid—so that financial aid administrators will have more time to devote to students.

“The sheer size and scope of federal regulations and other administrative burden has pushed financial aid offices to the breaking point,” said NASFAA President Justin Draeger. “Our specific policy recommendations, if enacted, would alleviate administrative and regulatory burdens so financial aid offices can do more to increase student access to and success in college, and decrease cumulative student debt.”

About NASFAA  

The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents nearly 20,000 financial aid professionals at 2,800 colleges, universities, and career schools across the country. Each year, financial aid professionals help more than 16 million students receive funding for post secondary education. Based in Washington, D.C., NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit