How Institutions Can Stay Compliant—Even When Staffed Below Capacity

By: Sean Hudson, FAS Consultant

Staying compliant with hundreds of federal and state financial aid regulations is difficult under normal circumstances. But for many schools today, “normal” no longer exists. Most financial aid offices are operating under extreme staffing shortages—and compliance has never been more at risk.

In 2023, the National Association of Student Financial Aid Administrators (NASFAA) and the Colleges and University Professional Association for Human Resources (CUPA-HR) surveyed almost 300 financial aid administrators, and more than half said they planned to look for a new job outside of financial aid. This was before the challenging rollout of the new FAFSA in 2024. With fewer hands on deck and more complexity than ever, financial aid leaders are being forced to rethink how they protect their institutions from compliance threats.

The High Stakes of Financial Aid Non-Compliance

Remaining in compliance with all regulations is the top priority for all financial aid staff and should be a priority for all college personnel. If a financial aid office fails to stay compliant, a school could lose the ability to award Federal and/or State aid. If this happens, the college will most likely close its doors.  

 In all my years working in higher education, I saw very few students who did not use some form of financial aid. This potential outcome of failing to maintain financial aid compliance makes it a campus-wide issue. All staff members in every department on a college campus should be concerned about managing compliance changes. 

3 Strategies for Managing Compliance with Limited Staff

Monitoring compliance changes takes time.  At times, the information the Department of Education provides to colleges is often confusing and incomplete. It can feel like trying to translate a document written in another language, all while trying to meet day-to-day deadlines. To stay ahead, financial aid leaders need to be intentional about how they use their limited time and resources. Here are three practical strategies that can help:

Automate, Streamline, and Delegate

Time is a finite resource. When your team is stretched thin, automating routine tasks becomes essential. E-signature tools, digital intake forms, and centralized systems can reduce the administrative burden and eliminate repetitive work. The investment in automating and streamlining several processes can result in a usable block of time for high-impact work with students. Directors can also ask their staff to help monitor compliance changes.  I monitored all changes and asked my staff to monitor for their specific job responsibilities.  This provided a safety net in case I missed anything. 

Find the Right Information Sources

With so many compliance updates coming from multiple directions, it’s important to be selective. Not all listservs, alerts, or forums provide the same value. Finding a reliable and easy source to learn about compliance changes is critical.  There are countless listservs and sources to choose from.  Directors need to find the ones that provide the most information with the least amount of effort.  I also found that leaning on my state professional organizations and fellow colleagues to helped me stay on top of changes.  At the state level, I turned to my friend Howard Leslie, and Wood Mason always had answers at Federal Student Aid.      

51% – The percentage of universities that feel ‘not so confident’ or only ‘somewhat confident’ that their financial aid services team fully understands the current state of federal, state, and local regulations that govern financial aid, according to our survey. 

Leverage External Partnerships

Sometimes the best way to make space for compliance work is to take something else off your team’s plate. For example, private loan disclosures can be managed through tools like ELMSelect. Time-intensive tasks like verification and processing can be outsourced to reliable partners with proven systems. These decisions give your internal staff more capacity to focus on what matters most—and protect your institution from risk.

 Challenges Deserve Solutions 

Many years ago, I thought of the analogy of trying to change a flat tire on a moving car without being able to stop the vehicle. It’s a very challenging task to undertake. Often, new regulations are released at the most inopportune times of the year, and unfortunately, we cannot stop everything to figure out what the new regulations say. The semester keeps rolling forward, and we need to try to understand and implement the changes as we are processing.  

Financial Aid Services (FAS) consultants understand the challenges of navigating the compliance landscape. Our services include: 

• Consulting & Training 

• Staffing solutions 

• Outsourced processing