“Instead of providing relief to the 43 million Americans who are drowning in student debt,” Sanders said in a statement to NPR, “the Trump administration has made it harder for them to understand how much they owe and how long it will take to pay it back.”
What the administration has to say about the GAO’s findings
The Federal Student Aid Office is required to conduct quarterly reviews, according to its contracts with lenders.
These reviews include comparing borrowers’ borrower records with the FSA’s own records to detect gaps or discrepancies, as well as “targeted reviews” of borrowers in specific situations, including those seeking temporary relief from their payments.
The assessments, which were suspended, are more labor-intensive than other types of oversight that are automated, the GAO said. According to the report, agency officials told the government watchdog that they had stopped these reviews in early 2025 “due to a lack of FSA staff capacity”. This is around the same time that the Trump administration began dramatically reducing staffing levels at the Department of Education.
According to the report, the FSA starts 2025 with 1,433 employees; by December there were 777 – a 46% reduction.
In a written response accompanying the report, Richard Lucas, the FSA’s acting chief operating officer, disagreed with the GAO’s recommendation that the FSA resume the reviews. While confirming that the FSA had indeed suspended the supervision in question, Lucas wrote: “The FSA has determined that the better approach is to provide substantive supervision through additional activities that measure the accuracy of the servicer’s data and the quality of its performance.” These activities include regular reviews of borrower satisfaction surveys.
Melissa Emry-Arras, who led the GAO study, says the FSA’s “better approach” is not better.
“While reviewing these satisfaction surveys can be helpful, they do not directly assess the quality of information provided to borrowers. A borrower may indicate that they are satisfied with the call without realizing that they received completely wrong information from their servicer,” she says.
The FSA’s latest review found problems with the accuracy of servicing credit
Scott Buchanan, executive director of the Student Loan Servicer Alliance, which represents servicers working on the federal student loan program, says servicers are also self-policing.
“(The utilities) do a lot more internal monitoring than any of our regulators ever could or would. Because it’s in our best interest to make sure that these mistakes are corrected. And because we have contracts and if we have big problems that have become glaringly obvious, then people will say, ‘We’ll get somebody else to do it.'”
In late 2024, before the Trump administration scaled back oversight, a GAO review of repairers’ recordkeeping found that “four out of five repairers did not meet the accuracy standard and face related financial penalties.”
In fact, the record-keeping at two service stations was difficult enough to merit the maximum financial penalty allowed.
And the GAO notes that the Department of Education’s independent financial auditor reported as recently as January 2026 that the department “continues to have a material weakness related to the reliability of its student loan data.”
What’s more, says Emri-Arras, the reduction in oversight at the FSA also means a reduction in efforts to hold servicers financially accountable for their performance. That accountability, she says, “is critical. Without it, the government risks overpaying for poor performance.”
For borrowers, servicer mistakes can lead to very real problems, Congressman Scott said in a statement to NPR. “Borrowers can either overpay or be placed in the wrong student loan repayment program. (The Department of Education’s) refusal to oversee student loan servicers is a dereliction of duty.”
Reduced oversight of major student loan changes
These staffing and oversight cuts come as millions of federal student loan borrowers will need help transitioning to new repayment plans. The Biden-era SAVE plan is in turmoil, with borrowers now being charged interest and the plan slated to close by 2028 at the latest. Another 12 million borrowers are or default on their loans or on their way there.
What’s more, a number of new, potentially challenging changes to the student loan program will begin in July – courtesy of the Republican One Big Beautiful Bill Act — including the introduction of two brand new repayment plans and the phasing out of others.
