A new Government Accountability Office (GAO) report released on March 11 finds that the Trump administration’s decision to lay off hundreds of workers at the Department of Education has undermined oversight of student loan servicers and left 43 million borrowers without adequate support. The report was commissioned by Sen. Bernie Sanders, Ranking Member of the Senate Committee on Health, Education, Labor, and Pensions (HELP), and Rep. Robert C. “Bobby” Scott, Ranking Member of the House Committee on Education and Workforce.
The findings are significant because they highlight how changes in federal oversight can affect millions of Americans with student loans. The GAO report states that nearly half the staff at the Federal Student Aid office were laid off during the Trump administration's first month, effectively ending its ability to hold loan servicers accountable for record accuracy and customer service.
Sanders said, “Instead of providing relief to 43 million Americans who are drowning in student debt, the Trump administration has made it harder for them to understand how much they owe and how long it will take to pay back by illegally firing nearly half the staff at the Federal Student Aid Office. That is unacceptable. But sadly, it is not surprising. Last year, the Trump administration made the largest cut to higher education in American history to help pay for a $1 trillion tax break to the top 1%. Now, President Trump is driving up the cost of a college education and student loan costs for tens of millions of Americans struggling with student debt when they can least afford it. That has got to change.”
Scott added, “The Education Department (ED), in its oversight of the $1.6 billion student loan portfolio, is required by law to ensure that student loan servicers provide borrowers with accurate information about their loans. When they do not, borrowers can either overpay or be placed in the wrong student loan repayment program. ED’s refusal to conduct oversight of student loan servicers is a dereliction of duty. Especially because, when ED conducted oversight under the Biden administration, it issued penalties to servicers when it found four out of five failed to meet basic accuracy standards. Moreover, I am gravely concerned that ED incorrectly believes it can replace real oversight of servicers with untested automation or artificial intelligence. These findings should serve as a flashing red warning sign for Congress about what is to come as ED ramps up to implement the Republicans’ overhaul of the student loan program in the ‘Big Ugly Bill’ and the havoc it will cause for borrowers. Lastly, if you are a borrower in need of assistance with your student loans, there is no one at ED to help you.”
The GAO report details several consequences: layoffs ended accountability measures for servicers; previous administrations penalized companies failing quality standards while current practices lack such enforcement; despite promises in September 2025 for improved oversight, basic protections have not been implemented as of December; and recommendations from GAO remain unaccepted.
The Senate Health, Education, Labor, and Pensions Committee plays an important role in legislating public health and education issues according to its official website. In addition to influencing federal regulations across these sectors according to its official website, it provides key policy oversight according to its official website and oversees agencies like FDA and NIH according to its official website. During this period in Congress, Bill Cassidy served as chair according to its official website.
Observers say these developments could have lasting effects on federal policy regarding higher education funding and borrower protections.
