Student Loan Oversight Scaled Back, Raising Concerns for Borrowers

Just over a year ago, the U.S. Department of Education significantly scaled back critical oversight of the companies managing the federal student loan program, according to a new report from the U.S. Government Accountability Office (GAO). This reduction in monitoring could have real consequences for borrowers navigating a complex system of repayment plans and potential forgiveness programs.

GAO investigators found that, beginning in February 2025, the Office of Federal Student Aid (FSA) stopped routinely reviewing the accuracy of loan servicers’ records. Crucially, the agency too ceased reviewing recordings of calls between borrowers and servicers, a practice intended to ensure borrowers receive accurate information. This shift in oversight raises concerns about the quality of service and the potential for errors impacting millions of Americans with student loan debt.

What the Oversight Changes Signify for Borrowers

The discontinued reviews focused on two key areas: data accuracy and call quality. Without verifying the accuracy of loan servicers’ records, borrowers risk being placed in incorrect repayment statuses, billed the wrong amounts, or experiencing delays in processing refunds. The cessation of call monitoring means there’s a heightened risk that borrowers may receive inaccurate guidance or poor customer service from their loan servicers. These errors, while potentially unintentional, can create significant financial hardship and confusion for individuals already grappling with student loan debt.

The investigation was prompted by requests from the ranking members of the House and Senate education committees, Representative Bobby Scott and Senator Bernie Sanders. Sanders expressed concern that the Trump administration prioritized reducing burdens on loan servicers over protecting borrowers, particularly as millions face challenges with repayment and potential forgiveness options.

Staffing Cuts and Shifting Priorities at FSA

The GAO report links the reduction in oversight to significant staffing cuts within FSA. The agency began 2025 with 1,433 staffers but saw that number plummet to 777 by December – a 46% reduction. Agency officials stated that the more labor-intensive reviews were halted due to “lack of FSA staff capacity.” This reduction in personnel coincided with broader staffing changes within the Department of Education under the previous administration.

However, the GAO questions whether alternative approaches to oversight are sufficient. Richard Lucas, FSA’s acting chief operating officer, argued that the agency is now focusing on “additional activities that measure the accuracy of servicer data and the quality of their performance,” such as borrower satisfaction surveys. Melissa Emrey-Arras, who led the GAO study, disagreed, noting that satisfaction surveys don’t directly assess the accuracy of the information provided to borrowers. A borrower might report satisfaction with a call even if they received incorrect advice.

Previous Oversight Findings Highlight Ongoing Concerns

Prior to the cutbacks, FSA’s own reviews revealed issues with servicer accuracy. At the conclude of 2024, a GAO review found that four out of five servicers failed to meet accuracy performance standards, with two facing maximum financial penalties. The Department of Education’s independent financial auditor reported in January 2026 that the department continued to have a “material weakness related to the reliability of its student loan data.” This suggests that even with previous oversight measures in place, data integrity remained a significant challenge.

Scott Buchanan, executive director of the Student Loan Servicing Alliance, maintains that servicers themselves prioritize accuracy and have internal monitoring systems. However, the GAO report and previous findings raise questions about the effectiveness of self-regulation and the need for independent oversight.

Navigating a Changing Landscape of Student Loan Repayment

These changes in oversight come at a critical time for student loan borrowers. Millions are transitioning into new repayment plans, including the Biden administration’s SAVE plan, which is facing its own set of challenges and is slated to be phased out by 2028. Over 12 million borrowers are currently in default or at risk of default. Adding to the complexity, a new law passed by Republicans, known as the One Huge Beautiful Bill Act, will introduce significant changes to the student loan program in July, including new repayment plans and the elimination of existing ones. These changes will require borrowers to understand and navigate a significantly altered system.

What to Expect in the Coming Months

The GAO recommends that FSA reinstate the previously suspended oversight activities. However, the agency has not indicated whether it will do so. Borrowers should be proactive in verifying the accuracy of their loan information and documenting all interactions with their loan servicers. It’s also crucial to stay informed about changes to repayment plans and eligibility requirements through official sources, such as the Department of Education’s website and the Federal Student Aid website.

The situation underscores the importance of robust oversight and accountability in the student loan program. As the program evolves and millions of borrowers navigate a complex landscape, ensuring accurate information and effective customer service will be paramount.

For more information on student loan repayment options and resources, visit the Federal Student Aid website.