Students and families faced a flurry of updates this week related to financial aid, student loan repayment, admissions strategy, and federal support for colleges serving underrepresented communities. Here are the developments worth knowing.
Here’s a quick look at the most important developments shaping higher education and student finance this week on December 12, 2025.
🎓 Top headlines at a glance
1. FAFSA adds a “reduced earnings” alert for some colleges
the The US Department of Education added A “Decline Profits” indicator. To the FAFSA starting this month. Students list colleges where graduates typically earn money less Only US adults with a high school diploma will now see a warning after submitting a form.
almost 23% of institutions They fall into this classification, based on federal earnings data. Here’s what it could look like:
Supporters say it gives families clearer information about financial outcomes before choosing a school. However, some institutions argue that this measure lacks appropriate context for specialized programs or regional labor markets.
➡️ impact: A new layer of transparency may help applicants compare cost with expected earnings — especially important for programs with higher borrowing needs. Check out the College Investor’s ROI Calculator to supplement this.
2. The savings payment plan is headed towards final cancellation under the legal settlement
A proposed settlement between the US Department of Education and several Republican-led states will be formally reached Termination of the SAVE payment planClosing the door to new registrants and transferring current participants to other payment structures if approved by the court.
SAVE has already been paused for over a year, and borrowers have been encouraged to change their plans now for several months.
However, 7 million borrowers are still waiting for final guidance and timing.
➡️ impact: Monthly payments may rise, forgiveness timelines may stretch longer, and budgeting will become more uncertain for families who rely on saving to manage debt.
3. Selective colleges push for greater economic diversity
Following the Supreme Court’s ruling on affirmative action, Many top colleges are stepping up recruitment of low- and middle-income students. Princeton, Yale, MIT, Duke and others report higher numbers of applicants and admits from low-income backgrounds, often associated with expanded tuition-free guarantees based on family income.
Despite these gains, organizations say they still struggle to maintain racial diversity using economics-based strategies alone.
➡️ impact: Students from low-income families may see more paths at selective institutions, although competition remains high and the broader diversity landscape continues to shift.
4. Department of Education issues draft rules for workforce Pell Grants
Education management Draft published language (PDF file) explains how Pell Grants for the Workforce (authorized under the One Big Beautiful Bill Act) will work. The proposal details how institutions must calculate Pell Awards when students receive outside grants, and sets early guardrails for eligible programs Qualified workforce training programs.
Stakeholders will continue to negotiate program definitions, communicate expectations, and safeguards.
➡️ impact: If finalized, these rules would affect how Pell helps cover short-term training linked to career advancement, affecting direct costs and access to programs for working adults and job seekers.
5. Texas colleges lose $64 million in federal HSI funding
more than 100 colleges and universities in Texas Lost access to Title V funding for Hispanic-serving organizationswith an estimated total 64 million dollars On sale this year. The funding halt comes in the wake of legal challenges related to federal support for race-related institutional classes.
Colleges point out that the cuts are already impacting academic advising, tutoring centers, mentoring programs, and student success initiatives that disproportionately benefit first-generation and underrepresented students.
➡️ impact: Losing Title V support could force institutions to reduce or reorganize services that help close equity gaps – increasing the risk of decreased student retention and increased borrowing needs among affected students.
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