2 big problems that could be caused by a financial aid staffing crisis

'We are sounding the alarm bells that many financial aid offices are critically short-staffed,' NASFAA says.
By: | May 27, 2022
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Staffing shortages are reaching crisis levels in financial aid offices, leaving administrators concerned about serving students adequately and complying with regulations. Responses from more than 500 colleges and universities “paint a grim picture” of worsening problems that began prior to COVID, according to a two-part survey just released by NASFAA, the National Association of Student Financial Aid Administrators.

Higher ed, and its financial aid teams, are grappling with the same wage stagnation, rising inflation and job dissatisfaction plaguing much of the U.S. workforce. And understaffing increases the chances that institutions could face fines for failing to comply with federal and state rules, NASFAA President Justin Draeger said. “We are sounding the alarm bells that many financial aid offices are critically short-staffed, which could create cascading issues for those colleges and universities, both in their ability to adequately serve students while also remaining compliant with federal and state rules,” Draeger said. “College presidents have a lot on their plate and, while they are often rushing from fire to fire, this is one area that should not be overlooked.”

The surveys were conducted online in March and May. Nearly 80% of the respondents worried about remaining “administratively capable,” meaning they would not have enough staff to manage compliance. More than half (56%) were concerned about meeting students’ needs.

The two surveys also found:

  • Half of the respondents to the first survey reported operating at a 75% staffing capacity in 2019-20 and 2020-21.
  • 56% of respondents to the second survey reported that they did not have time to complete the original survey because of limited staff.
  • Permanent, full-time employees cited three main reasons for transferring or resigning: a higher salary or better benefits elsewhere (69%); no longer having the desire to work in financial aid (35%), and moving to a different office at the same institution (29%).
  • An overwhelming majority of aid offices (86%) said they are not receiving enough applications from qualified candidates.
  • The large majority of those (67%) felt it was squarely an issue of salary restrictions that made the job uncompetitive.

More from UB: Why COVID isn’t the only reason enrollment declines are getting worse


In another troubling financial aid development, new FAFSA filings are down 9% and FAFSA renewals have fallen 12%, according to a National College Attainment Network report released earlier this month.

A number of factors, including increased employment opportunities, affordability and time to earn degrees might be driving the slowdown in FAFSA entries. “We think about FAFSA as a leading indicator of enrollment and retention,” says Bill DeBaun, the Network’s senior director of data and strategic initiatives. “We think about it as a signal of students’ intent to enroll. If we are seeing this large decline in renewals, we have to consider the very real possibility that students are sending a signal that their enrollment decisions have changed.”