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Career education is a vital pipeline to high demand jobs in the workforce. Students from all walks of life benefit from the opportunity to pursue their career education goals and find new employment opportunities. Join Dr. Jason Altmire, President and CEO of Career Education Colleges and Universities (CECU), as he discusses the issues and innovations affecting postsecondary career education. Twice monthly, he and his guests discuss politics, business, and current events impacting education and public policy.
Jason Altmire [00:00:04]:
Hello, and welcome to another edition of Career Education Report. I'm Jason Altmire. And today our guest is Melanie Storey. She is the president and CEO of the National Association of Student Financial Aid Administrators, NASFAA, and she's somebody who has risen up through the ranks, been on all sides of higher education, and I'm looking forward to having the conversation. Melanie, thank you for being with us.
Melanie Storey [00:00:32]:
Thanks so much, Jason. Excited to be here with you all.
Jason Altmire [00:00:36]:
I was so thrilled to see when you succeeded Justin Drager. Justin is not only a friend, but is, you know, very prominent in Washington, D.C. and did a great job leading NASFAA. And you always wonder when somebody of that stature leaves an organization how they're going to find someone to replace them. And you're a perfect example of someone who is absolutely perfectly situated for the job that they hold. And I'm just going to walk through some of what you've done immediately. You came from you were director of policy Implementation and oversight for the U.S. Department of Education's Office of Federal Student Aid, which of course very relevant to your current position.
Jason Altmire [00:01:26]:
And before that you held positions at the College Board, at the American Council on Education and at the National Association of Independent Colleges and Universities. So you really do know all sides of higher ed, including having served in the department in a position that is directly applicable to the role that you now hold. So I really am grateful that you've taken the time to be with us today and I'm glad that you're in that role.
Melanie Storey [00:01:55]:
Thanks. Thanks so much. I've been blessed with a really lengthy career in Washington, always with an eye to advocating for access and affordability to post secondary education, both in the nonprofit sector and within the government. So always, always with a single, a singular focus, but from a number of different angles.
Jason Altmire [00:02:18]:
Talk a little bit about NASFAA, I think of all the associations in town that deal with higher education, NASFAA is the one that really does touch everybody. You know, there are certain silos, different types of institutions, different focuses and interests, but any school that's involved, of course, in higher education is very concerned and interested about issues relating to student financial aid. So how do you navigate the process of representing such a diverse constituency on a topic that is so important to so many schools?
Melanie Storey [00:02:57]:
So NASFAA has about 2,900 institutions, are somewhere between 2700 and 2900, depending on where we are in our membership cycle, but represent about 29,000 individuals who work in financial aid. But ultimately, you know, our focus is largely at the federal level for the federal student aid program. So loans, grants Work study. And really those can be somewhat sector agnostic. And financial aid administrators really are focused on making sure that those programs can be administered and they can be good stewards of the hundreds of billions of dollars literally that the federal government invests in these programs. So we want to make sure that our members can be good stewards of those funds, but making sure that we are not putting barriers in front of students to access those funds. And so the advocacy of that really then can be around sound fundamental principles around financial aid and how to support students in their post secondary journeys and making sure that we streamline that implementation so that institutions are not also overly burdened in delivering that aid and ensuring that they can focus on students access and delivering quality outcomes for the students who are investing their time and money, as well as the government's time and money in their programs.
Jason Altmire [00:04:25]:
And having served in the agency that is directly applicable to the members that you serve in the office that is most relevant, how would you say that informs the work that you do? Having been in the Department of Education and now being part of the association that represents schools that are dealing with those issues at the department?
Melanie Storey [00:04:47]:
Well, it really gave me a bird's eye view of some of the challenges we put in front of our collective members. I served as the director of Policy Implementation at Federal Student Aid in the time period that we were implementing the new fafsa, what we called FAFSA simplification. It's no secret that that was a, to say the least, a challenging implementation. And so what that I was able, really I learned through working with JUSTIN and naspa, but all of the other associations representing higher education how important financial aid is to the overall ecosystem of institutions, but how critical, careful and smooth implementation is, because really when one piece of the, of the process is broken, the whole process is broken. And it really, students and families depend on this in order to have, you know, a smoother ability to apply and finance and afford higher education. So working at the department was incredibly informative and useful. And I bring a lot of that knowledge to NASFAA in terms of how to best serve our members in those efforts for simplification and removing of barriers. The truth of the matter is the first 90% is pretty straightforward delivering on these programs.
Melanie Storey [00:06:12]:
It's the 10%, it's the outliers, it's the unusual situations because we have an obligation to serve all students and all programs. The complexities come from those sort of outlier situations. And I learned a lot about how to navigate the various systems and policies across the, across programs and across entities, whether it's federal government states, the institutions themselves, the vendors that our institutions rely on to deliver on these programs. I learned a lot about all of the different players who are part of this, as well as how what can seem like simple changes have enormous ripple effects on the ability to deliver aid to students and on our institution's ability to navigate all of the things that they are navigating on campus in order to be compliant, in order to meet all of the rules and regulations of these programs, but most importantly, making sure that we are getting those funds into the hands of students. And so it was an invaluable experience to be there, particularly quite frankly, at such a challenging time. I think you learn more from your mistakes and failures sometimes than you do from your successes. And so I think I bring a lot of that learning to my time here at naspa.
Jason Altmire [00:07:31]:
If you don't mind. I mean, since you brought it up, just maybe quickly explain, because I think listeners who are interested obviously are aware of what happened with the rollout with FAFSA. And since you were there, I mean, what exactly were the issues? What led to it being such a troubling rollout?
Melanie Storey [00:07:50]:
Oh my. I did bring it up. So I'm open to those conversations, no doubt, but I mean, we could go through a lengthy conversation on that. But when I try to distill it, I believe that we spent a lot of time on the front policy end of past the simplification without giving enough airtime and budget to appropriately implement it. Understandably, Congress was eager to make these important changes, but the system's implications were wide ranging and vast. And quite frankly, I think the department needed to be a better negotiator in terms of what was a realistic timeline for that implementation. So I do think time was an important part of it because again, when I talk about all of the different players who needed to be ready, I think we often tend to think about just the systems that the Department of Education, but it required the enormous amount of change in other systems at our institutions, at our states and others, and so the downstream length of time that it would take for that implementation. But if I'm also taking responsibility for my role and at the department, I would also say one of the issues I think was around integration.
Melanie Storey [00:09:07]:
FAFSA simplification wasn't just about the form. It was new integration with the irs. It was a new set of data that was being sent to institutions. It was integration with the calculation and changes to the calculations. It really touched on almost every system at the Department of Education. And I think the department too often worked in silos and that integration often came too late and then required us to go back and rethink decisions, which was time consuming and costly. So I think there are a lot of things along the long journey of FAFSA simplification where we could have made better decisions with the benefit of hindsight. But the two things I would say were really just understanding the enormity of the effort.
Melanie Storey [00:09:54]:
Simplification is not simple and the timeline and investment that was required to do it well, and the need for more robust integration across all of the different stakeholders and again across all of the different systems.
Jason Altmire [00:10:09]:
And having lived through that experience so closely, you are now in position. I've seen you've written and you've even spoken about the current Department of Education as it relates to staff cuts in the downsizing of the department and concerns that you and NASFA have about the impact of the lack of personnel will mean. Can you talk a little bit more about that given the experience that you've had?
Melanie Storey [00:10:36]:
Sure. I mean, in any kind of organization as large as the Department of Education or any agency, quite frankly, I mean, I think we'd be foolhardy to say that there were not efficiencies to be gained and improvements to be made. And I think that we should always have an eye to that. But to my experience and to my eye, the way that the reductions were done at the department were not done strategically. I think they were done more broadly. I don't have insight into the decision making as to how those decisions were made, but I do know that entire units were eliminated and those units in their entirety were serving a purpose and they were doing good work. So it didn't strike me as sort of efficiencies or ways to do the work better, faster, cheaper. I think it was kind of a more single minded approach toward just a reduction of staff.
Melanie Storey [00:11:33]:
And then now they're kind of trying to figure it out. But I think they're working hard. They're working hard to find efficiencies using technology, finding ways to use AI and other things to help in their customer service areas. I mean, I do think there are lots of important activities happening. You know, they're doing reorganizations to make sure they are matching the skill sets with the offices that need it. Now. That said, you know that there's pain points to that and there's, you know, sort of a, again, kind of a, a learning curve and a growth that has to happen there that I don't, I don't think we fully or they fully anticipated the immediate impacts and how long it might take to kind of resolve. And so early on, as you will remember, back in the spring, there was, you know, a significant effort to offer various early retirements and buyouts to staff.
Melanie Storey [00:12:27]:
And then of course, there was a significant reduction in force shortly after that. Shortly after I started at naspa, we did a survey of our institutions, really trying to just do a benchmark. Were they seeing significant impacts on that reduction in staffing, on the work that they were doing with the department, the institutions our institutions were doing with the department. And that can be everything from, you know, responsiveness to call centers, you know, servicers, student support, a broad range of things. Remember, institutions work closely with the department to ensure that they are compliant and that they have done all the work they need to do on the back end to make sure that they are eligible to administer financial aid. It's not as visible as the FAFSA form, but this is important work that institutions are legally required to undertake to make sure they can administer aid. And back in May, when we first administered that survey, we did hear pretty broadly that about, oh, I don't know, 59% of the institutions, the respondents, about 900 respondents, were reporting some concerns. We refielded that survey again in the summertime in the July timeframe, and that number unfortunately increased to about 72% of institutions that responded were reporting delays.
Melanie Storey [00:13:52]:
You know, again with a lot of these kind of behind the scenes activities that the department needs to work with institutions to make sure that they are eligible to administer aid. And so, again, I understand and appreciate that the department is working hard to get up to speed and to work through sort of the reorganization. But I also think it is my responsibility to communicate the real lived experience of those administrators that are trying to serve students and the barriers that they are facing as a result of the changes that the department has been making.
Jason Altmire [00:14:27]:
You mentioned the survey. Obviously, as somebody who leads an association for you, it's very important to know the views and priorities of the folks that you're representing. How has that influenced your thinking and the association's thinking on the negotiated rulemaking process that is ongoing and the reaction to the reconciliation bill, the one big beautiful bill, and the higher ed provisions that were in there. What do you consider to be the association's priorities related to so much happening in higher education right now?
Melanie Storey [00:15:05]:
I think our priority, whether it is about the negotiated rulemaking or anything else that might be coming down the pike as it relates to student financial aid, is to be mindful for a smooth implementation. I can't emphasize that enough. Like, surely NASFAA had a perspective on the one big beautiful bill Act. Not everything that is in the act is necessarily something that my members were enthusiastic about, but that no longer matters. Now it is, it is law. The reconciliation bill is moving towards streamlined repayment, changes in loan limits, stronger and different accountability measures for institutions, important changes to the Pell Grant. These are extraordinarily important and core to the work of financial aid administrators. And now those are the law.
Melanie Storey [00:15:55]:
So whether we are talking about, you know, sort of the conversations ongoing via Negreg or other decisions being made at the department, NASFA truly will ask for transparency and clarity in those decisions. Decisions again, because that drives the impact on implementation. It drives sort of what will happen downstream. The decisions that the department makes about any of these changes, whether it is again driven by Negreg or just internal decisions, will have implications for institutions. How we counsel students, the systems that we use, the data that we require, all of that. It doesn't live simply at the department. It has implications for the institution. So our focus now is on the provisions of the bill, all of which impact the work on campuses, that we have clear, transparent decision making and communication about it as early as possible so that the institutions can be ready to implement as soon as the department is ready to implement.
Jason Altmire [00:16:58]:
When you're talking about transparency, which we agree is incredibly important, NASFAA has been a strong champion of the College Cost Transparency Initiative and Azure Workhorse that helps students understand their financial aid offers for the upcoming year. And as we move forward, how does NASFAA view the next step on that issue? Moving beyond annual cost information, but maybe to a more comprehensive program level. Transparency, looking at things, maybe time of completion, total debt, graduation rates, earnings outcomes are those things that you support as an association. When you think about transparency, we do.
Melanie Storey [00:17:42]:
So you mentioned the College Cost Transparency Initiative. That's an important initiative that NASPA undertook, I guess, a few years ago now, really, to encourage institutions to be consistent and clear on how they communicate their costs, both indirect and direct costs, so that students and families can plan with that transparency. As you well know, the one big beautiful Bill ACT also introduces new accountability measures. Our interest in that is that it be consistent and not duplicative. As you know, there are other accountability measures, things like ge, financial value, transparency and other things that are still in play. What we are encouraging the department is to have, you know, sort of clear set of metrics and measures that all institutions will report and to be measured against. And so we look Forward to those continuing conversations and making sure that we have meaningful return on investment measures for students and families to consider when they are making their choices for post secondary education.
Jason Altmire [00:18:46]:
Along those lines, I wanted to touch on something I know that is incredibly important when you're thinking about return on investment and the cost to student. Of course, the Department of Education recently did away with the pause on repayment which had gone into effect with COVID and stayed in place for many years. So students now are expected to again start the repayment process with their loans to keep up. And the department released a list of schools whose graduates were in danger of not meeting the thresholds that were necessary related to cohort default rates. Their students weren't paying back as much as they should, or at least we're not on the right path. What do you think are the best practices for schools to work with graduates and even current students in helping inform them about the importance that these are loans, these are supposed to be paid back. And when people have graduated, those that were impacted by the COVID pause to encourage even graduates to reenter that repayment mindset.
Melanie Storey [00:19:58]:
Yeah, so the, the publication of the non repayment rates was an important step for schools to see the, you know, sort of what their graduates activity looked like in terms of their loan repayments. I will say the last, you know, boy howdy, the last five years have been quite a journey from COVID through the FAFSA issues and particularly around loan repayment and the pause on repayment. I think this is really a partnership between the federal government and the institutions. And I will say that the last five years have introduced so much uncertainty and lack of clarity for borrowers to understand what they need to be repaying, when they need to be repaying it, whether they are in a forbearance, what type of forbearance. One really positive outcome from the one big beautiful Bill act is a streamlining of the repayment programs. We have too many, they are confusing. How can we help students plan and understand and be prepared to pay back the loans that they have taken? The debt that they have incurred? I think happens on the front end. I think it starts on the front end and it starts with clarity about how much they've borrowed and the implications of that and what repayment options will be available to them and clarity on those repayment options that we're not changing the, we're not moving the goalposts that these are the repayment options that will be available to them so that they can make choices on how much they borrow and Whether or not that is a realistic expectation of repayment based on, you know, earnings expectations for the program that they might be enrolled in.
Melanie Storey [00:21:39]:
But institutions have a counseling responsibility for that as well, to make sure that students understand, again, how we communicate the aid that we are offering to students. And what is a loan, what is required to be paid back, and how will it be required to be paid back. That is an important responsibility of transparency for the institutions. But again, in partnership with the government, we want to make sure with the federal government that we have clear and consistent repayment options. We also want to make sure, though, that there are safe harbors. I mean, life is a mess. Life is complicated. Anyone who is a borrower may find periods of time when they need to go into forbearance that they may need some support.
Melanie Storey [00:22:22]:
That's great. But we need to make sure that they understand what the limitations are of that and what the consequences of those particular choices might be. So again, institutions, financial aid administrators in particular, have a responsibility to counsel students as they are making their enrollment choices, whether they are admitting or annually, and the implications of that borrowing, but then on the backside of the program, when they're ready to graduate, that we are sharing with them what they should expect, who they will hear from, what that repayment process will look like. And again, that has been a pain point for the department as well. There's lots of issues around servicers, lots of issues around communications so that students know what and when they are expected to repay. And so I think we need to sort of reinvigorate that partnership. Again, I'm going to say it over and over again. It should be about transparency and consistency and clarity so that we support students not just when they enter our institutions and when they're in our care, but also once they have left to make sure that they are also meeting their obligations as it relates to their student loans.
Jason Altmire [00:23:35]:
Well, this has been an incredibly informative conversation. I really appreciate you being here. You've done so much. You only started your tenure on May 1st of this year, and you've already accomplished so much with the association with so much more to come. If somebody wanted to get in touch with you or learn more about nasfa, how would they do it?
Melanie Storey [00:23:56]:
Sure they can, if they just want to learn more about nasfa. Our Internet home is nasfa N A S F a dot org and I always welcome folks to reach out to me. My email is storey S-T-O-R-E-Y at msfa.org.
Jason Altmire [00:24:15]:
Our guest today has been Melanie Storey. She's the president and CEO of the national association of Student Financial Aid Administrators, nasfa. Melanie, thank you for being with us.
Melanie Storey [00:24:27]:
My pleasure. Thanks so much. Jason.
Jason Altmire [00:24:33]:
Thanks for joining me for this episode of the Career Education Report. Subscribe and rate us on Apple Podcasts, Google Play, Spotify, or wherever you listen to podcasts. For more information, visit our website at career.org and follow us on Twitter @CECUED. That's at at C-E-C-U-E-D. Thank you for listening.