GAO Says Education Department Halted Key Student Loan Servicer Oversight in 2025

A new Government Accountability Office report finds that the U.S. Department of Education’s Office of Federal Student Aid stopped two core oversight activities over federal student loan servicers in February 2025: quarterly reviews comparing servicers’ borrower records to FSA’s own data, and monitoring recorded customer-service calls to check whether borrowers receive accurate information. GAO warns the lapse means roughly 43 million federal student loan borrowers may be at higher risk of being put in the wrong repayment status, billed incorrect amounts, or denied timely refunds, and of receiving bad information they may not realize is wrong. According to GAO, FSA officials blamed a lack of staff capacity as Trump‑era cuts reduced FSA’s workforce from 1,433 employees at the start of 2025 to 777 by December, a 46% drop, even though FSA’s servicing contracts require quarterly reviews. In a written response, acting FSA chief operating officer Richard Lucas confirmed the reviews had stopped but argued the agency has shifted to other tools, like borrower satisfaction surveys, to oversee servicers—a rationale GAO’s lead investigator, Melissa Emrey‑Arras, criticizes as inadequate because surveys do not directly test the accuracy of servicer advice. The investigation, requested by Rep. Bobby Scott and Sen. Bernie Sanders, is already feeding political attacks that the administration has made it harder, not easier, for borrowers to navigate repayment, and raises broader questions about whether federal loan servicers are effectively operating without some of the government’s most labor‑intensive quality controls.