Students and parents are facing rising college costs, legal uncertainty, and new signals from the federal government — all at the same time. This week’s top stories reflect this tension: warnings about institutional stability, a legal challenge that could upend aid for undocumented students, and a renewed movement over student loan forgiveness.
Here’s a quick look at the most important developments shaping higher education and student finance this week on November 28, 2025.
🎓 Top headlines at a glance
- Credit rating agency Moody’s maintains a “negative outlook” on US colleges for 2026.
- California’s financial aid for undocumented students is facing a legal challenge from the federal government.
- The U.S. Department of Education has resumed processing student loan forgiveness applications.
- California State Treasurer Fiona Ma was on The College Investor podcast talking about saving for education.
San Diego State University, San Diego, California
1. Moody’s maintains a negative outlook on higher education
Moody’s reaffirmed the credit rating Negative expectations for the higher education sector in 2026He warned that rising costs, demographic headwinds and shrinking enrollment rates could strain the finances of many institutions.
The report expects college revenue growth to slow, while expense growth may outpace income — especially for smaller or less selective institutions. Debt-burdened schools and those that rely on tuition may face pressure to cut costs, reduce programs, or increase tuition for remaining students.
➡️ impact: As colleges strive to achieve financial stability, some may raise net costs, reduce course offerings, or tighten admissions – which may limit options, increase competition, or change the value proposition of certain degrees.
2. The legal struggle over financial aid for undocumented students in California
Federal government I filed a lawsuit (PDF) Challenges California policies that provide in-state tuition and state financial aid to undocumented students who meet residency or high school enrollment requirements. The challenge targets financial aid plans used by public colleges and universities in the state.
If successful, this case could lead to the end of in-state tuition for many undocumented and coeducational students, potentially forcing them to pay higher out-of-state tuition, lose access to state grants, or forego college altogether.
➡️ impact: For undocumented students or those from mixed-status families, college affordability may suddenly change. Families should monitor the progress of the condition closely and consider backup plans, including community colleges.
3. Resume student loan forgiveness processing at the Department of Education
The U.S. Department of Education has restarted processing student loan forgiveness and discharge applications, meaning borrowers who qualify under income-based repayment for loan forgiveness may begin having their loans canceled.
We’ve seen a lot Success stories via Reddit And other social media platforms.
➡️ impact: This is great news for student loan borrowers who have reached 240 or 300 payment milestones. This is a positive development, especially in light of upcoming changes in the taxability of student loan forgiveness.
4. California Treasurer Fiona Ma Advocates for 529s, CalKIDS, and CalABLE
In a new episode of University investor Podcast, California State Treasurer Fiona Ma and CalABLE CEO Thomas Martin explain how three state programs (ScholarShare 529, CalKIDS, and CalABLE) aim to help families save for education and long-term financial security.
Ma explains how ScholarShare 529 can be used to cover college and other qualified education expenses, how CalKIDS automatically replenishes many children’s accounts with state funds, while Martin talks about how CalABLE allows people with disabilities to save and invest without losing key benefits.
Treasurer Ma also notes that her office is pushing for a potential statewide tax deduction or credit for 529 contributions — a change that could prompt more middle-income families to save regularly.
➡️ impact: These programs offer “free money” and tax benefits that many residents still ignore. For families in California, combining initial CalKIDS funds with ongoing 529 and CalABLE contributions where appropriate can reduce future borrowing and make college and disability-related expenses more manageable.
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