In his first address directly to student financial aid professionals, the Office of Federal Student Aid’s chief operating officer, Richard Cordray, said Tuesday that a continuing downward trend in completion rates for the Free Application for Federal Student Aid and declining enrollment “is a serious problem for all of us.”
According to the National College Attainment Network’s FAFSA Tracker, weekly FAFSA completion rates have been lower than the previous cycle since the 2021–22 cycle began on Oct. 1—with the exception of last week, which saw a 0.4 percent increase in completions from this time last year. FSA has also seen a decline in federal Pell Grant disbursements for this year.
“We’ve been noting the negative effects of the pandemic on enrollment,” Cordray said on the first day of FSA’s Virtual Training Conference. “We saw a slight decline last year, which was understandable enough given the challenges everyone was confronting. But now, the early data from this year on FAFSA completion suggests the downward trend is continuing and it’s significant. We cannot afford more cohorts of high school graduates who are somehow failing to move into the next stages of higher education.”
FSA will be monitoring data closely in the coming months and years to find trends, said Cordray.
At the top of the overall priority list for his office is the oversight of student loan servicers and institutions, which Cordray said “should be no surprise,” given his background as the first director of the Consumer Financial Protection Bureau and former Ohio attorney general.
Cordray highlighted the Department of Education’s new inclusion of stronger performance, transparency and accountability standards in loan servicers’ contract extensions so that his office can better monitor and address servicing issues. He also discussed the revival of an Office of Enforcement within FSA to ensure institutions are complying with all of the department’s legal requirements.
“We intend to be careful stewards of taxpayer money,” Cordray said. “Our support for schools must be balanced by a responsibility to engage in effective oversight.”
Enforcement efforts will focus on areas of “heightened risk,” including instances of rapid growth, financial irregularities, high cohort default rates or spikes in complaints from students, according to Cordray. The office will also scrutinize actions that appear to be attempts to thwart the department’s oversight, such as an institution’s conversion from for-profit to nonprofit status or certain changes in ownership.
The department plans to share details about its oversight activity publicly so that other institutions know what they should avoid to remain in compliance with the law.
Cordray also discussed FSA’s strategy for the upcoming restart of student loan payments, which, he noted, is “the most pressing issue FSA currently faces.” The office will focus on executing a communications strategy through messaging directly to borrowers, using social media to spread awareness, advertising federal student loan information on search engines and working with various organizations—such as community groups, alumni associations and professional associations—to share information.
“We are informing borrowers about their options, such as signing up or renewing their enrollment in the auto-debit program, which is the easiest way to make their monthly payments,” Cordray said. “We are also encouraging borrowers to apply for income-driven repayment plans if they need help making their monthly payments more affordable.”