As Federal Agencies Slash Staff, Here’s How Student Loan Borrowers Can Protect Themselves

Crippling staff reductions at the U.S. Department of Education and the Consumer Financial Protection Bureau (CFPB) are leaving student loan borrowers increasingly vulnerable as they navigate complex repayment options and forgiveness programs.

As federal oversight wanes, student loan borrowers must take a more active role in managing their debt.

Staff cuts, policy changes disrupt borrower services

Several federal agencies have been decimated by the staff reductions implemented by the Department of Government Efficiency (DOGE). This will make it harder for student loan borrowers to get help or have applications processed in a timely manner. There will also be reduced oversight over federal loan servicers.

U.S. Department of Education

The number of staff at the U.S. Department of Education decreased by 47 percent, from 4,133 to 2,183 as of mid-March 2025. They laid off 1,378, plus 572 employees who accepted separation packages, yielding a total reduction of 1,950.

This includes 326 layoffs at the office of Federal Student Aid (FSA), nearly a quarter of the 1,371 employees. FSA runs the student loan program in addition to the Free Application for Federal Student Aid (FAFSA) and other federal student aid programs. The FSA Ombudsman, which helps resolve borrower complaints and disputes involving federal student aid, lost 8 of 21 staff, a 38 percent decrease.

In the news

On May 22, 2025, the U.S. District Court of Massachusetts issued a preliminary injunction against these mass layoffs and the transfer of federal student loans to the Small Business Administration. The judge pointed out that while the administration acknowledges it needs Congress’s approval to shut down the ED, “A department without enough employees to perform statutorily mandated functions is not a department at all.”

According to the FSA 2024 Annual Report, the U.S. Department of Education received 289,523 complaints in FY2024, more than double the 122,632 complaints received in FY2023. But now, the button to submit a complaint via the FSA Feedback Form has been buried in the page footer and renamed “Submit Feedback.”

CFPB

The CFPB announced plans to lay off 1,483 employees, reducing its workforce by 88 percent from 1,690 to 207. However, a late April decision in federal appeals court temporarily blocked this mass firing.

The CFPB has an important role in investigating reports of illegal and abusive practices by federal loan servicers and requiring servicers to make changes and pay restitution.

According to the 2024 CFPB Annual Report, the CFPB received 13,524 complaints about federal student loans via the CFPB Complaint Form in 2023-24, 3,399 about private student loans and 1,354 about debt collection (646 about federal student loans and 708 about private student loan).

Complaints received by the CFPB Complaint Form are automatically routed to the lender or loan servicer for resolution and do not all result in an independent investigation by the CFPB.

But in April, the CFPB issued a reprioritization memo that stated that the bureau will deprioritize student loans. The memo also says that the bureau will “respect other federal agencies’ regulatory ambit” and “minimize duplicative enforcement.” So, to the extent that the CFPB still addresses borrower complaints, it will focus on private student loans, leaving oversight of federal student loans to the U.S. Department of Education or its successor.

Small Business Administration

The Small Business Administration (SBA) announced a 43 percent cut in staff at about the same time that President Trump announced that the management of federal student loans will move to SBA. This move has not happened yet, as it will require an act of Congress.

U.S. Department of Education faces processing delays

According to the May 15, 2025, report by the U.S. Department of Education, as of April 30, 2025, there were 1,985,726 pending applications from borrowers trying to get on seeking an income-driven repayment plan. Throughout April, the ED processed only 79,349 applications, or about 4 percent.

There was also a backlog of 49,318 PSLF Buyback applications, with only 1,472 (3 percent) processed during the month of April.

The backlog will soon grow: Eight million borrowers will need to switch repayment plans when the interest-free SAVE forbearance ends.

While call pickup at the Federal Student Aid Information Center (FSAIC) call center has dropped to less than a minute, the call volume surged after the U.S. Department of Education announced the resumption of enforced collections. Borrowers should still call the 1-800-4-FED-AID (1-800-433-3243) number, but should try calling first thing in the morning or use the chat feature.

How borrowers can advocate for themselves

In this challenging environment, it is crucial for borrowers to take proactive steps to protect their rights and advocate for themselves.

Use self-service tools

Borrowers can visit their dashboard on StudentAid.gov to find out who their loan servicer is and review their loan balances, interest rates and more. Knowing your loan servicer lets you directly contact them for specific inquiries. You can also access your student loan information from the loan servicer’s website.

Borrowers should maintain a record of all of their loans, including, for each:

• Type of loan
• Loan servicer
• Amount owed
• Monthly payment amount
• Interest rate
• Debt remaining

They can obtain this information from StudentAid.gov and their loan servicer’s website. They should also keep dated records of all communication with servicers (including emails and phone call logs with names and dates).

Borrowers should also maintain a spreadsheet tracking their complete payment history, such as the date each payment was made, the payment amount, their employer and any deferments and forbearances. Tracking your payment history provides crucial documentation in case of discrepancies, which might occur during a change of loan servicer or the processing of applications for loan forgiveness.

If a borrower is pursuing Public Service Loan Forgiveness (PSLF), they should file the PSLF Help Tool annually and whenever they change employers.

Non-government sources of help

Borrowers can visit their loan servicer’s website or call their loan servicer for information about their loans and for help dealing with problems.

Most lenders and loan servicers have an ombudsman who tries to address borrower complaints and concerns in a fair and impartial manner. Contact the loan servicer’s ombudsman for unresolved issues.

Borrowers can also call their college’s financial aid office for help. The college financial aid office can help borrowers understand student loan terms and repayment options.

Complaints may be filed with the Better Business Bureau (BBB). Private lenders often try to resolve complaints that appear on the BBB website.

Enforcement

Enforcement of lending rules will shift to the states. States have jurisdiction over borrowing by state residents and borrowers who went to college in the state.

Past examples of state enforcement efforts include settlements concerning illegal inducements by education lenders and Operation Game of Loans’ crackdown on paperwork scams.

Borrowers can get help by calling the Bureau of Consumer Protection in their state attorney general’s office.

Bottom line

In this new era of reduced support, informed and persistent borrowers are their own best advocates. Track your records, follow up regularly and don’t hesitate to escalate issues to state agencies or advocacy organizations when necessary.