This week's stories show the federal student loan system entering the implementation phase. The 2026-27 student loan interest rates are official and one university's restructuring under state law has triggered a federal civil rights lawsuit. Meanwhile, a major cybersecurity incident hit thousands of schools during finals, and a major new study out of Texas confirms what families want to know: does college actually pay off?
Here's a quick look at the most important stories shaping higher education and student finances this week for May 15, 2026.
🎓 Headlines at a Glance
- Kentucky State University students sue to block a state-mandated overhaul of the public HBCU.
- Federal student loan interest rates are set to rise for the 2026-27 academic year.
- Canvas paid the ransom but 275 million users' data was already exposed.
- A new Texas study of nearly one million students confirms college pays off, but the program you pick matters more than the school.
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1. Kentucky State Students Sue To Block State-Mandated Restructuring Of HBCU
A group of Kentucky State University students, alumni, and prospective students filed a federal class action lawsuit on May 11 to block Senate Bill 185, a Kentucky law that converts the state's only public HBCU from a liberal arts university into a polytechnic institution and imposes strict state financial controls. The law requires KSU to limit its offerings to 10 academic areas during a period of financial exigency and get state approval for any purchase over $20,000.
The lawsuit, filed in the U.S. District Court for the Eastern District of Kentucky, alleges violations of Title VI of the Civil Rights Act, the Equal Protection Clause, and federal land-grant funding requirements. Plaintiffs point to a 2023 federal finding that KSU received roughly $172 million less in land-grant funding than the University of Kentucky over decades.
➡️ Impact: Current and prospective KSU students should monitor the litigation closely. The plaintiffs are seeking a preliminary injunction to halt program cuts and layoffs while the case proceeds. More broadly, this is the first major civil rights challenge to a state's restructuring of a public HBCU, and the outcome could shape how other states approach interventions at financially stressed minority-serving institutions.
2. Federal Student Loan Interest Rates Rise For 2026-27
We now know what the federal student loan interest rates will be for the 2026-27 academic year.
Federal Direct Stafford rates for undergraduates will rise to 6.52% (up from 6.39%), graduate Stafford to 8.07% (up from 7.94%), and Parent PLUS to 9.07% (up from 8.94%). All rates remain below their statutory caps, and the increase of roughly 0.13% across the board reflects the modest rise in the May 10-year Treasury yield.
The College Investor has the full breakdown with historical context here, including how today's rates compare to the 2.75% pandemic-era undergraduate floor in 2020. Parent PLUS borrowers face the steepest cost at 9.07% plus the standard 4.228% origination fee — one of the more expensive federal borrowing options.
➡️ Impact: Families borrowing for the 2026-27 school year should plan around the higher rates. The change is small in isolation, but it compounds across a 10-year standard repayment plan and even more on extended timelines. For a freshman borrowing the full $5,500 annual undergraduate limit at 6.52%, total interest costs run about $1,991 over the life of that single year's loan. The rates take effect for loans first disbursed on or after July 1, 2026.
3. Canvas Paid The Ransom — But The Data Was Already Out
Instructure, the parent company of the Canvas learning management system, confirmed on May 11 that it had reached an agreement with the ShinyHunters hacking group following a two-stage breach that disrupted thousands of universities during finals week.
Canvas is used by roughly 41% of U.S. higher education institutions, including Columbia, Princeton, Harvard, Georgetown, Rutgers, Penn State, Northwestern, and the entire UC system. ShinyHunters claimed it stole 3.65 terabytes of data covering 275 million users across 8,809 institutions, including names, email addresses, student ID numbers, and private messages between students and faculty.
Instructure said it received "digital confirmation of data destruction" and assurances that customers would face no further extortion. Cybersecurity experts have been critical of the decision, noting that ransom payments reinforce the economic incentives behind cyber extortion and that stolen data remains a phishing risk regardless of any agreement. The College Investor has been tracking the outage live as institutions restore services. Some colleges disconnected from Canvas entirely as a precaution.
➡️ Impact: Students and faculty at affected institutions should treat any unexpected email referencing their coursework, grades, or Canvas accounts as a potential phishing attempt for the foreseeable future. Change your Canvas password, turn on multi-factor authentication where available, and use a unique password if you'd been reusing one across accounts.
4. New Texas Study: College Pays Off — But Program Matters More Than Institution
A major new study from the Postsecondary Commission and Mathematica, tracked 935,767 students who entered Texas public colleges and universities from 2008-09 through 2018-19. Using actual earnings data and matched comparison groups, the study calculated cumulative net "value-added earnings" or VAE, based on what students actually earned after accounting for tuition costs, foregone wages during enrollment, and what they would likely have earned without college.
The headline findings: bachelor's degree-seeking students averaged $86,806 in cumulative net value-added earnings 15 years after entry. Associate's degree-seeking students averaged $25,338 over 10 years. Certificate-seeking students averaged $3,818 over 5 years.
Bachelor's students hit financial break-even in year 10, associate's students in year 7, and certificate students in year 4.
But the averages mask huge variation. Among bachelor's programs, the highest-earning cohort delivered $204,686 in cumulative net earnings,while the lowest cohort still produced a positive $35,410.
The starker numbers come from certificate programs, where 64% of programmatic cohorts produced negative net value-added earnings.
The biggest takeaway: a student's choice of program explained more variation in earnings than their choice of institution. And institution choice explained substantially more than household income level.
➡️ Impact: For families weighing whether college is "worth it," this is one of the most rigorous answers yet, and the answer is generally yes, especially for bachelor's programs.
But the data also confirms what The College Investor has been saying for years: the major and the program matter more than the school name.
STEM bachelor's students averaged $131,604 in net value-added earnings; non-STEM averaged $81,403. And nearly two-thirds of certificate programs delivered negative net earnings.
Students considering short-term credentials should look hard at program-level outcomes before enrolling.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.