“As a substitute of offering aid to 43 million Individuals who’re drowning in scholar debt,” Sanders mentioned in a press release to NPR, “the Trump administration has made it more durable for them to know how a lot they owe and the way lengthy it should take to pay again.”
What the administration has to say about GAO’s findings
The Workplace of Federal Scholar Support is meant to conduct quarterly opinions, based on its contracts with mortgage servicers.
These opinions embrace evaluating mortgage servicers’ borrower data with FSA’s personal data, to display screen for gaps or discrepancies, in addition to “focused opinions” of debtors in particular conditions, together with those that request non permanent aid from their funds.
The assessments that have been stopped are extra labor-intensive than different kinds of oversight which have been automated, GAO says. In accordance with the report, company officers advised the federal government watchdog they stopped these opinions in early 2025 “because of lack of FSA employees capability.” That’s across the identical time the Trump administration started dramatically lowering staffing ranges on the Schooling Division.
In accordance with the report, FSA started 2025 with 1,433 staffers; by December, it had 777 — a 46% discount.
In a written response accompanying the report, Richard Lucas, FSA’s appearing chief working officer, disagreed with GAO’s suggestion that FSA resume the opinions. Whereas he confirmed that FSA had, certainly, stopped the oversight in query, Lucas wrote, “FSA decided that a greater method is to offer substantial oversight via further actions that measure the accuracy of servicer knowledge and the standard of their efficiency.” These actions embrace common opinions of borrower satisfaction surveys.
Melissa Emrey-Arras, who led the GAO research, says FSA’s “higher method” isn’t higher.
“Whereas reviewing these satisfaction surveys could also be useful, they don’t immediately assess the standard of the data given to debtors. A borrower could point out they have been glad with a name, not realizing they got fully incorrect data by their servicer,” she says.
The final FSA assessment discovered issues with mortgage servicer accuracy
Scott Buchanan, the chief director of the Scholar Mortgage Servicing Alliance, which represents the servicers engaged on the federal scholar mortgage program, says servicers additionally police themselves.
“[Servicers] internally are monitoring excess of any of our regulators ever may or would. As a result of it’s in our greatest curiosity to verify these errors are fastened. And since we’ve contracts, and if we’ve main points which have change into clearly obvious, then folks will say, ‘We’ll discover another person to do it.’”
On the finish of 2024, earlier than the Trump administration reduce oversight, GAO’s assessment of servicer recordkeeping discovered that “4 of the 5 servicers didn’t meet the accuracy efficiency customary and confronted related monetary penalties.”
The truth is, recordkeeping at two servicers was troubled sufficient to benefit the utmost monetary penalty allowed.
And GAO notes that the Schooling Division’s unbiased monetary auditor reported as just lately as January 2026 that the division “continued to have a cloth weak point associated to the reliability of its scholar mortgage knowledge.”
What’s extra, Emrey-Arras says, scaling again oversight at FSA has additionally meant scaling again efforts to carry servicers financially accountable for his or her efficiency. This accountability, she says, “is vital. With out it, the federal government dangers overpaying for poor efficiency.”
For debtors, servicer errors can result in very actual issues, mentioned Rep. Scott in a press release to NPR. “Debtors can both overpay or be positioned within the incorrect scholar mortgage reimbursement program. [The Education Department’s] refusal to conduct oversight of scholar mortgage servicers is a dereliction of obligation.”
Scaled-back oversight of massive scholar mortgage modifications
These cutbacks in employees and oversight come as hundreds of thousands of federal scholar mortgage debtors will need assistance transitioning into new reimbursement plans. The Biden-era SAVE plan is in turmoil, with debtors now being charged curiosity and the plan because of be closed by 2028 on the newest. One other 12 million debtors are either in default on their loans or on their manner there.
What’s extra, in July, a raft of latest, doubtlessly difficult modifications to the scholar mortgage program will start — courtesy of Republicans’ One Big Beautiful Bill Act — together with the introduction of two brand-new reimbursement plans and the phasing out of others.
