Borrowers seeking assistance from the Education Department for student loan issues are encountering roadblocks due to recent staffing reductions. The elimination of the team dedicated to the Public Service Loan Forgiveness program has left many without support. This development comes as federal student loan debt, which affects approximately 42 million Americans, surpasses $1.6 trillion. The staff cuts pose a significant threat to the department's role in addressing borrower complaints.
At least eight staff members who were handling nearly 800 student loan complaint cases were among those dismissed. Each year, hundreds of thousands of individuals submit grievances to the Office of the Ombudsman at Federal Student Aid. With the resumption of collection activities following the end of pandemic-era relief, the need for a responsive support system is more critical than ever.
"We lost that expertise and the ability to answer complaints in a timely manner." – An Education Department staffer
The new repayment plan, SAVE, which had millions enrolled, faces an uncertain future after being blocked by the courts. As a result, about 9.2 million borrowers—43% of those with due payments—are falling behind. Despite these challenges, dismantling the Education Department requires congressional approval. However, the Trump administration's strategy of reducing resources threatens to undermine its effectiveness.
"The ombudsman team was one of the first places to raise the alarm when there were systemic problems." – Persis Yu, deputy executive director and managing counsel at the Student Borrower Protection Center
Staffers tasked with resolving federal student loan holder complaints were among those laid off. One employee is currently assisting a woman in having her student debt discharged due to her disability. The uncertainty of staff availability has led to anxiety for borrowers dependent on their assistance.
"Every time we talk she's terrified I won't be there the next time." – An Education Department staffer
Persis Yu of the Student Borrower Protection Center emphasized the broken state of the student loan system, lamenting that there is currently no refuge for borrowers seeking help.
"The student loan system is broken, and right now there's nowhere for borrowers to turn." – Persis Yu, deputy executive director and managing counsel at the Student Borrower Protection Center
The resumption of collection activities means that many borrowers risk wage or benefit garnishment if they fall into delinquency.
"People will start having their wages or benefits garnished." – An Education Department staffer
This predicament leaves borrowers vulnerable to having their finances seized without any recourse.
"Borrowers would be stuck having their money seized without a way to stop it." – An Education Department staffer