The U.S. Department of Education cut nearly half of its workforce earlier this year, raising concerns about the impact on student financial aid. Now, a survey of about 900 colleges shows those fears are becoming reality.
Many students who depend on federal aid are facing problems getting the help they need. Hundreds of colleges reported communication breakdowns, slow processing, and reduced federal support since the layoffs. The survey was done in early May by the National Association of Student Financial Aid Administrators (NASFAA).
About 60% of colleges noticed slower responses from the Federal Student Aid office, which manages nearly $2 trillion in student loans. Over 350 schools said delays in federal communication have left students confused or misinformed.
More than 40% of colleges reported issues with federal loan servicing. Meanwhile, financial aid staff at schools are working longer hours and taking on extra duties to fill the gaps. Half of the colleges said their regional Federal Student Aid office had shut down.
Colleges also reported outages in key federal systems since March. Officials said the Education Department has failed to update important records and has made it harder for schools to access necessary platforms and data.
Many schools described long phone wait times and delayed email replies from the federal office. Some have not been able to reach the agency at all since mid-March, raising concerns about the availability of federal contacts.
Melanie Storey, president of NASFAA and a former Education Department official, said the layoffs are already hurting students and schools. She called the cuts “unrealistic and foolhardy” without a plan to handle the extra work. Storey urged the department to act quickly to fix the problems before the damage becomes irreparable.
The Education Department disputed the survey’s findings. Spokeswoman Ellen Keast said that while students faced delays completing the Free Application for Federal Student Aid (FAFSA) during the Biden administration, the Trump administration is delivering results on time.
She added that the department has improved key aid processes like identity verification and simplified parent invitations, and that the 2026-27 FAFSA form is on track.
The layoffs began in March 2025, when the department dismissed nearly half its 4,133 employees and closed most regional offices. This included significant cuts to the Office of Federal Student Aid, which handles FAFSA and student loans.
Many technical support staff were let go, affecting the department’s ability to maintain systems and assist schools. Other offices, like the Office for Civil Rights and the Institute of Education Sciences, also experienced major staff reductions.
These cuts have led to delays and confusion in processing financial aid applications and managing student loans. College officials warn that without restoring staff and support, students’ access to federal aid could be seriously disrupted.
In summary, the Education Department’s staff reductions have caused widespread problems in the federal student aid system. Colleges report slow responses, system outages, and communication failures that hurt students relying on federal aid. The department denies the severity of the issues but faces growing pressure to address the fallout quickly.
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