The week of May 22, 2026 revealed a string of developments that pull in opposite directions for higher education policy. On one hand the Department of Education is rebuilding capacity inside the Office of Federal Student Aid, while on the other hand officials continue public plans to shift responsibilities to other agencies. Simultaneously, states have taken legal action against new borrower limits, the agency finalized a major grant expansion, and high school seniors posted an unexpectedly strong FAFSA performance. This roundup frames those items and highlights what students, borrowers, and families should track in the coming weeks.
Federal Student Aid: staffing growth amid plans to redistribute authority
Internal reporting shared with the press shows the Office of Federal Student Aid (FSA) has added personnel even after steep cuts earlier in the administration. The documents indicate FSA currently operates with about 731 full-time equivalent staff, down from 1,440 prior to the current administration, and says it still “needs to hire an additional 334 FTEs to meet our target.” Observers noted roughly 380 hires have been made in recent months, with 52 staff onboarded since September. These hires occur as Secretary Linda McMahon advances interagency agreements that would move some functions to Treasury, Labor, and other departments, creating the odd contrast of building capacity inside FSA while publicly promoting a redistribution of its duties. The practical effect for borrowers is that processing backlogs for IDR reviews, PSLF certification and buyback requests, and consolidations are likely to persist as the office regains momentum; the department is simultaneously launching new rules and operational changes that will increase workload while staffing levels recover.
Lawsuit targets new graduate loan caps and the definition of professional study
On May 19 a coalition of states filed suit to block the $100,000 graduate loan caps and a tightened definition of professional student included in the OBBBA final rule. The rule adds four criteria to the professional student concept that were not in the statute: the degree is “generally at the doctoral level,” typically requires six or more years of postsecondary study, ordinarily requires licensure “to begin practice,” and aligns with specific four-digit Classification of Instructional Programs codes. Plaintiffs say those additions exclude many fields that traditionally relied on graduate borrowing, especially a range of health care professions. The litigation asks courts to vacate the contested provisions before they take effect on July 1, 2026, placing uncertainty over borrowing limits for students who plan to start programs this fall.
Who should be especially watchful
Students entering advanced health care programs such as advanced practice registered nursing, physician assistant studies, physical or occupational therapy, audiology, and similar fields should follow the case closely because the rule’s definition can cut off access to additional federal loans. Current borrowers with legacy protections—often described as grandfathered Grad PLUS or similar statuses—should avoid institution transfers, withdrawals, or reenrollment decisions that could jeopardize those protections. Until a court acts, treat July 1, 2026 as a practical deadline and consult financial aid offices or legal counsel before making moves that could affect eligibility under the new aggregate cap.
Workforce Pell, FAFSA momentum and rising state flexibility
The department issued the final regulation for Workforce Pell on May 19, opening Pell Grant eligibility to short-term, outcomes-oriented training. Under the rule, eligible programs last between 8 and 15 weeks (or 150 to 599 clock hours), require dual approval by the state governor and the Department of Education, and must meet performance thresholds for earnings and job placement. Apprenticeship time can count toward up to 49% of a workforce program under a written arrangement, and fully online programs are excluded. Implementation begins on July 1, 2026, with full effect for programs starting after July 20, 2026, though some institutions may adopt the rule earlier. For adult learners and career changers pursuing short-term credentials in welding, HVAC, healthcare support, or information technology, this change expands access to federal grant aid—but enrollment should hinge on whether a program appears on the state’s approved Workforce Pell list.
FAFSA gains and expanding state authority
Amid regulatory churn, the Class of 2026 produced a bright outcome: as of May 1, 54.7% of graduating seniors had completed the FAFSA, surpassing the prior record of 54.4% and marking a recovery from the 2026 decline. That earlier completion gives families more time to compare aid awards and increases the chance of full access to campus-based funds. At the same time, the department authorized Ed-Flex waivers for Florida and Illinois, bringing the total to a record 18 states with increased flexibility to waive certain federal rules for Title I and related programs. The combined effect underscores a shift: federal rules are changing while states gain discretion, so families and students should monitor state education announcements, verify program approvals for workforce Pell eligibility, and file the FAFSA early to maximize aid options.
