DOJ Opts Not to Defend HSI Program, Report Concludes Disruptions in Federal Student Aid Office, ED to Reinstate Employees, FAFSA Updates
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August 25, 2025
Leading the News this Week
On July 25th, the Department of Justice wrote to Speaker Mike Johnson (LA-04) notifying him that it finds the provisions in the Hispanic Serving Institutions (HSI) program "violate the equal-protection component of the Fifth Amendment’s Due Process Clause." Thus informing him that the DOJ will not defend the HSI program entangled in a lawsuit. Continue to the next section for additional information.
News in Higher Education
Department of Justice Opts Not to Defend Hispanic Service Institutions Program
The Department of Justice (DOJ) has opted out of defending the Hispanic Serving Institution (HSI) program, alleging that this program is unconstitutional. The program, which released an FY 25 competition earlier this summer, was legally challenged by the Students for Fair Admissions and the state of Tennessee, claiming that the HSI program is discriminatory and ought to be modified so that all institutions can apply for HSI funds, not only those that have at least 25 percent of Hispanic students enrolled. While the Trump administration has decided not to defend the HSI program, the Hispanic Association of Colleges and Universities (HACU) has requested to intervene in this case as a defendant; a request that a U.S. District Court judge has not yet ruled on, and which has not seen opposition from the Department of Education. ACCT is staying in touch with our partners at HACU and closely monitoring the developments in this case, and we will share additional information with our members as we learn more.
Report Concludes Disruptions in Federal Student Aid Office
According to a report from the National Association of Student Financial Aid Administrators (NASFAA), 72 percent of financial aid administrators have seen changes in the Federal Student Aid office's communications, responsiveness, and processing times since the Department of Education's mass layoff in March. NASFAA reports that the survey results indicate that "federal support channels for students are breaking down." The Department of Education pushed back on this report by questioning the methodology used in obtaining survey answers and by claiming it does not represent the "higher education community nor the American people’s overwhelming charge for change.”
Department of Education to Reinstate Laid-Off Office of Civil Rights Employees
In a series of waves from September 8th to November 3rd, the Department of Education will reinstate 260 laid-off Office of Civil Rights employees. This reinstatement comes after a federal judge's order in Victim Rights Law Center v. U.S. Department of Education to restore the Department of Education to "the status quo" so that it can "carry out its statutory functions." ACCT is monitoring this decision and whether the Trump administration will appeal this decision to the Supreme Court.
The 2026-2027 FAFSA is Under Beta Testing
Nearly two weeks ago, the Department of Education launched beta testing of the Free Application for Federal Student Aid (FAFSA) form. Now the second phase, known as Beta 2, of the 2026-2027 FAFSA is open. This phase will feature 1,000 current or prospective students, their parents or guardians, or contributors. Students who participate in Beta 2 testing will not need to resubmit a FAFSA form at the conclusion of the testing, as their submission during the Beta test is accepted as their actual submission, and they can later make corrections to their application. As a reminder, the Department of Education is now statutorily mandated to launch the 2026-2027 FAFSA form on October 1, 2025.
- August 28: Written Comments on Negotiated Rule Making for H.R. 1 Deadline
- Sep 5, 01:00 PM ET: LAW Live Webinar
- September 17: Public Comment Period for New Rules on PSLF Deadline
- October 22 - 25: ACCT Leadership Congress
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