MHEC outlines financial‑aid modernization after vendor error revoked guaranteed‑access grants
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Summary
MHEC told the committee it will honor awards revoked by a vendor configuration error on the legacy aid platform, implement safeguards in a new Maryland Student Information System (MD SIS), and continue a single 'one‑app' process while addressing staffing and timing constraints that cause award redeployment delays.
Maryland Higher Education Commission deputy secretary Elena Quidoz Lavanes told the Education, Energy, and the Environment Committee that MHEC will honor guaranteed access grants that were mistakenly revoked by a vendor script on its legacy financial aid processing system and that the agency is deploying new technical and process safeguards in a replacement system.
Lavanes said the vendor configuration error occurred last August on the legacy Maryland College Aid Processing System when the vendor’s script misvalidated income data and triggered an automated recalculation that revoked awards days before classes began. “The vendor, when they recognized this bug in their script, ended up recalculating all of the awards without notifying MHEC,” she said. MHEC immediately decided to reinstate and honor the awards for affected students.
MHEC manages roughly $220,000,000 in state aid annually across 27 grants, scholarships and loan‑assistance programs and distributes about 50,000 awards per year, Lavanes said. To modernize processing and reduce similar risks, MHEC is building a new Maryland Student Information System (MD SIS) scheduled for a fall launch that will include stricter validation rules and require agency approval before any automated recalculation that could change awards.
Lavanes described three utilization challenges: large numbers of award cancellations (40–60% of initial awards may be declined or canceled before term start), niche programs with too few eligible applicants to spend their allocations, and multiple overlapping awards per student that increase administrative verification burdens. MHEC uses an over‑awarding strategy and year‑round redeployment to fill slots but said timing — when returned funds arrive late — can leave eligible students without on‑time support.
Committee members asked how MHEC will handle outreach and staff limits. Lavanes said outreach is handled by a small team and MHEC partners with the State Department of Education, nonprofits and other agencies to deliver training and direct assistance; MHEC also launched a single application on Jan. 15 to simplify access to multiple programs but noted statutory verification requirements for individual programs remain.
On federal rule changes affecting Pell and aid calculations, Lavanes said MHEC is finalizing an institutional readiness assessment and expects to be prepared for implementation by July 1, 2026. She said the agency is coordinating with institutions and the governor’s workforce development board to minimize risk of losing federal funds.
