Higher Ed Is Building Disclosure for the Wrong Reader

What securities law understood about disclosure that higher education still doesn’t

On July 1, the Department of Education published the final rule creating the Student Tuition and Transparency System (STATS). For the first time, the government will require every institution that accepts federal student aid to report, program by program, the total public and private funding behind tuition and fees for every student across their entire enrollment. Almost one year ago, the White House directed the Department of Education to overhaul the Integrated Postsecondary Education Data System, culminating in a new disclosure supplement reporting admissions and academic data by demographic group (ACTS). Together, these two events represent the largest expansion of higher education disclosure in a generation. Neither of them was built for the student.

Having previously worked in the U.S. securities practice of a corporate law firm, I am trained to ask of any disclosure regime: who exactly is it for? Federal securities law exists because the people supplying capital to companies are dispersed, arm’s-length, and information-poor. This was especially true of the “mom and pop” investors ruined before the New Deal. The standard by which securities law deems disclosure necessary is measured against the investor: something is “material” only if an investor would think it is important when making a decision. One would expect higher education disclosure to exist for the benefit of dispersed and information-poor students. This is not the case.

Unlike in securities law, where investors are the primary source of capital, the funding sources for higher ed institutions are fragmented, even within comparable bands of prestige. Harvard derived 46 percent of its operating revenue from endowment distributions and gifts in the year ended June 30, 2025, while student-generated revenue and federal research grants accounted for 22 percent and 10 percent, respectively. NYU, by contrast, derived 59 percent of its operating revenue from net tuition and fees in the year ended August 31, 2025, but only 18 percent and 5 percent from grants and endowment, respectively. Among these funding sources, the federal government is the only entity capable of extracting mandatory, standardized, sector-wide disclosure. Donors receive audited financial reports from university governance. But even when students provide the majority of an institution’s revenue, the disclosure system still treats them as incidental beneficiaries, not the intended audience.

This matters because the questions animating IPEDS and STATS disclosure are not necessarily the ones that students want answered. In the securities world, disclosure is meant to surface information that would be “material” for the person deploying capital. Correspondingly, IPEDS and STATS are designed to address the government’s priorities in disbursing Title IV funds. STATS enables the Department of Education to enforce a statutory earnings test that can strip failing programs of federal student loan eligibility. The Trump administration mandated the creation of ACTS to serve its compliance-monitoring interest in Students for Fair Admissions v. Harvard. The student benefits from these granular disclosures only by accident.

This sets the student’s lack of bargaining power in sharp relief. The government extracts disclosure from universities because they gate access to federal student aid. The municipal bond markets extract disclosure through offering documents because they gate access to credit. But even state actors can fail for lack of leverage. The State of California lacked leverage over Stanford, which withdrew from state student aid to take itself beyond the scope of AB 1780’s legacy ban and reporting requirements. No single student has leverage over a university she wants to apply to. More often, she and her family invest time and tuition on the basis of selected data that flatter the school, either from the Common Data Set or marketing. This is not because there is no information available. There’s a lot. Just none of it is designed for the student to read.

None of this is to say that the new framework is worthless. STATS combines College Scorecard earnings data with newly disclosed program cost data, derived from institutional reporting across essentially the entire sector that no ranking or independent researcher could assemble. But the government’s interest in evaluating recipients of Title IV funds shapes the disclosure process. The applicant is left with yet another data source that only partly addresses her priorities.

This creates a gap that the private market has grown to supply. Part of the reason independent admissions advisors are paid is that public records are organized around governments’, lenders’, and donors’ questions, not the family’s. If we decompose the premium paid to independent admissions advisors, a portion comes from strategy, a portion comes from process management, but yet another portion comes from synthesizing data that a teenager or her family cannot reasonably be expected to sift through. That slice of the private market is a symptom of a public system that never addressed the student to start with.

The design of the new disclosure regime is not settled. The STATS earnings framework is rolling out now, and its reach beyond degree-granting programs to undergraduate certificates may be challenged in court like the preceding financial value framework. However, the questions we will continue to debate — whether admissions is fair, what a degree is worth, which institutions deserve public support — depend not only on how much information we have but whom that information is structured to inform. For decades, higher education has built its disclosure for the party holding the money. The student has been left to buy the difference.

Works Cited

Alonso, Johanna. “Trump Orders Colleges to Supply Data on Race in Admissions.” Inside Higher Ed, 7 Aug. 2025, www.insidehighered.com/news/admissions/traditional-age/2025/08/07/trump-orders-colleges-supply-data-race-admissions.

“As New Application Period Approaches, Stanford Shares Admissions Criteria.” Stanford Report, Stanford University, 29 July 2025, news.stanford.edu/stories/2025/07/admissions-criteria-application-period.

Dormitory Authority of the State of New York. “Official Statements.” DASNY, www.dasny.org/investor-relations/official-statements.

Harvard University, Financial Administration. Financial Report: Fiscal Year 2025. Oct. 2025, finance.harvard.edu/sites/g/files/omnuum12671/files/2025-10/fy25-financial-report.pdf.

New York University, FinanceLink. “Financial Statements.” NYU FinanceLink, www.nyu.edu/employees/resources-and-services/financelink/accounting-and-reporting/financial-statements.html.

Thompson, Farnaz Farkish, et al. “Education Department Proposes New Earnings Accountability Framework for Higher Education.” McGuireWoods, 1 May 2026, www.mcguirewoods.com/client-resources/alerts/2026/5/education-department-proposes-new-earnings-accountability-framework-for-higher-education/.

Trump, Donald J. “Ensuring Transparency in Higher Education Admissions.” The White House, 7 Aug. 2025, www.whitehouse.gov/presidential-actions/2025/08/ensuring-transparency-in-higher-education-admissions/.

TSC Industries, Inc. v. Northway, Inc. 426 U.S. 438. Supreme Court of the United States, 14 June 1976. Justia, supreme.justia.com/cases/federal/us/426/438/.

United States, Department of Education. “Accountability in Higher Education and Access Through Demand-Driven Workforce Pell: Student Tuition and Transparency System (STATS) and Earnings Accountability.” Federal Register, vol. 91, 1 July 2026, pp. 40136–287, www.federalregister.gov/d/2026-13286.

Claude Opus 4.8 (Anthropic) was used for spell-checking, proofreading, fact-checking, and citation formatting.

Cover photo licensed from Vecteezy.

All ideas, arguments, source selection, and writing are my own.