Agencies decreasing workforce: Guidance for student loan debtors on self-advocacy
Student Loan Borrowers face Challenges as Federal Agencies Slash Staff
Struggling student loan borrowers are confronted with prolonged delays and limited assistance as staff reductions at the U.S. Department of Education and the Consumer Financial Protection Bureau (CFPB) mount. With waning federal oversight, it's more crucial than ever for borrowers to advocate for themselves.
Seeking help can be done through available resources such as StudentAid.gov, loan servicer websites, and state consumer protection offices. To navigate the complex repayment options and forgiveness programs, borrowers must take a proactive stance in managing their debt.
Mark Kantrowitz, an expert on student financial aid, shared insight on the current circumstances:
Staff Cuts and Policy Shifts Disrupt Services
Federal agencies such as the US Department of Education and the CFPB have been gravely affected by staff reductions, leading to increased difficulties for borrowers in receiving a timely response or the processing of applications. There is also a reduction in the oversight of federal loan servicers.
In March 2025, the US Department of Education announced the layoff of approximately 1,300 employees, representing almost half of its workforce. Major offices like the National Center for Education Statistics and the Federal Student Aid (FSA) office, which handles millions of students' financial aid, were affected.
As a result, higher education leaders and student advocates have raised grave concerns over the Department's ability to fulfill its mission, such as administering financial aid, overseeing civil rights enforcement, and ensuring federal funding oversight. The cuts threaten to disrupt services that millions of student loan borrowers rely on, reducing access to assistance, repayment options, and oversight of federal student aid programs.
Following the layoffs, a federal judge issued a preliminary injunction, blocking the administration's plans to dismantle the Department of Education and ordering the reinstatement of all terminated employees since January 2025. This legal action may restore some staffing and service capacity.
The CFPB has not disclosed recent information regarding staffing or service changes impacting student loan borrowers.
U.S. Department of Education Services Disrupted
Layoffs at the US Department of Education led to a significant reduction in the agency's ability to support students and borrowers. This deterioration will negatively impact borrowers seeking help and processing applications in a timely manner.
There are currently 1,985,726 pending applications from borrowers looking to get onto an income-driven repayment plan. In April 2025, the Department only processed 79,349 applications, about 4 percent of the total. The backlog will likely continue to grow as eight million borrowers must switch repayment plans when the interest-free SAVE forbearance ends.
Call pickup at the Federal Student Aid Information Center (FSAIC) call center has dropped to less than a minute, but the call volume surged after the US Department of Education announced the resumption of enforced collections. Borrowers should still call the 1-800-4-FED-AID (1-800-433-3243) number, or try the chat feature, especially first thing in the morning.
Encouraging Self-advocacy for Borrowers
In this challenging environment, informed and dedicated borrowers are their best advocates. To protect their rights and navigate complicated processes, borrowers should:
- Utilize self-service tools, such as visiting their dashboard on StudentAid.gov and reviewing their loan balances, interest rates, and more. Obtaining this information will allow borrowers to directly contact their loan servicer for specific inquiries.
- Create a record of all loans, including their type, loan servicer, amount owed, monthly payment amount, interest rate, debt remaining, and dated records of all communication with servicers. Maintaining accurate records will prove invaluable in the event of discrepancies.
- Track their complete payment history, which includes the date each payment was made, payment amount, employer, deferments, and forbearances. This documentation will help in case of discrepancies while changing loan servicers or processing loan forgiveness applications.
- If pursuing the Public Service Loan Forgiveness (PSLF), borrowers should utilize the PSLF Help Tool annually and whenever they change employers.
- Call their college's financial aid office for help in understanding student loan terms and repayment options.
- Contact their loan servicer's ombudsman for unresolved issues.
- File complaints with the Better Business Bureau (BBB), as private lenders often try to address complaints listed on the BBB website.
- Contact the Bureau of Consumer Protection in their state attorney general's office for additional help.
In conclusion, during this period of reduced federal support, diligent and proactive borrowers are their own strongest advocates. By recording their records, following up regularly, and seeking help from state agencies or advocacy organizations as needed, borrowers can navigate these challenging circumstances.
- To gain a better understanding of personal-finance matters related to student loans and explore available repayment options, borrowers should visit the official student aid website, StudentAid.gov.
- In light of the federal agencies' staff reductions and potential delays, it's crucial for students to develop skills in self-advocacy and investigate alternative avenues for financial assistance, such as investing or career-development initiatives that offer skills-training opportunities.
- Given the challenges faced by student loan borrowers as federal agencies cut staff, proactive borrowers can also consider pursuing additional education-and-self-development resources and networking within their industries to strengthen their professional footing.
