FEDERAL STUDENT LOANS - Highlights - GAO-26-108534 - Education Needs to Address Gaps in Servicer Oversight

Oct 15, 2026

Uploaded by Bintang

GAO-26-108534 examines how staffing reductions affected the Department of Education’s oversight of contracted federal student loan servicers. In February 2025, Education stopped assessing servicers’ accuracy and call quality due to insufficient staff capacity, without replacement methods by December 2025. GAO reports that most servicers previously failed accuracy standards and that Education continued other metrics. GAO recommends restoring accuracy and call-quality assessment.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages20

Reading Time50 min

AccessFree to download

Letter

Background

Education Staff Reductions Have Led to Decreased Oversight of Servicers

Conclusions

Recommendation for Executive Action

Agency Comments and Our Evaluation

Appendix I

Comments from the Department of Education

Appendix II

GAO Contact and Staff Acknowledgments

Figures

Figure 1: Selected Roles and Responsibilities in the Federal Student Loan Program

Figure 2: Timeline of Actions Related to Department of Education Staffing Levels, January–August 2025

Figure 3: Student Loan Servicer Performance on Accuracy and Call Quality Metrics

United States Government Accountability Office Report to Congressional Requesters March 2026 FEDERAL STUDENT LOANS Education Needs to Address Gaps in Servicer Oversight Highlights GAO-26-108534 FEDERAL STUDENT LOANS Education Needs to Address Gaps March 2026 in Servicer Oversight A report to congressional requesters For more information, [contact: Melissa Emrey-Arras at](contact: Melissa Emrey-Arras at EmreyArrasM@gao.gov)[ EmreyArrasM@gao.gov](contact: Melissa Emrey-Arras at EmreyArrasM@gao.gov). What GAO Found In February 2025, the Department of Education’s Office of Federal Student Aid (FSA) stopped assessing student loan servicers on accuracy and call quality due to lack of staff capacity, according to agency officials. Prior to discontinuing these quarterly assessments, FSA assessed servicers on these metrics for two quarters through the following actions. • Accuracy. FSA would review data for borrowers in servicer systems and compare it to data in FSA systems to determine if servicers were keeping accurate records for borrowers. • Call quality. FSA would review phone calls between borrowers and servicers to determine if servicers were providing good and accurate customer service. The decision to stop assessing these performance metrics occurred shortly after the new administration began issuing presidential directives and guidance on downsizing the federal workforce in January 2025. Education reported that between January and December 2025, the number of staff at FSA dropped from 1,433 to 777, a reduction of 656 personnel. Prior to FSA discontinuing this oversight, most servicers did not meet the performance standards for accuracy and faced corresponding financial penalties of about $850,000 . FSA continued to assess servicer performance on their other performance metrics, which it characterized as less labor intensive to monitor. Student Loan Servicer Performance on Accuracy Metric In September 2025, FSA officials said Education was working to implement more efficient oversight methods that leverage data analysis and exploring possible changes to the contract performance standards. However, as of December 2025, FSA was not using any replacement methods for overseeing accuracy and call quality and had not changed the performance standards. By not assessing servicer accuracy and call quality, FSA lacks assurance that borrower records are correct and that servicers are giving borrowers quality information. Inaccurate records can result in borrowers being billed for incorrect amounts or placed in the wrong repayment status. Additionally, borrowers need to be given accurate information when they call for help. Addressing these gapsin servicer oversight will assist Education in carrying out its statutory responsibilities and also help the government avoid overpaying servicers for poor performance. Why GAO Did This Study FSA is statutorily responsible for managing federal student aid programs and overseeing contracted student loan servicers. The servicers process loan payments, provide borrowers with information on repayment plans and forgiveness options, and maintain loan records. In April 2024, FSA implemented new contracts for its student loan servicers that set performance standards for student loan servicers on six metrics, including accuracy and call quality. Under these contracts, FSA enforces financial penalties if servicers do not meet performance standards related to these metrics. GAO was asked to review Education’s capacity to carry out its statutory responsibilities. This report examines the extent to which recent staffing reductions have affected how FSA carries out its responsibilities to oversee loan servicers. Additional reports will examine related topics at other offices within Education. For this report, GAO reviewed FSA documentation, servicer performance and billing reports, and relevant laws. GAO also interviewed FSA officials as well as representati

FAQs

What oversight change did Education make in February 2025 regarding servicers?

Education stopped assessing federal student loan servicers on accuracy and call quality due to lack of staff capacity. It provided no replacement methods for overseeing those metrics as of December 2025.

What staff reductions affected FSA’s ability to perform oversight?

Between January and December 2025, the number of FSA staff dropped from 1,433 to 777, a reduction of 656 personnel. GAO links the decision to stop assessments to this period following new presidential directives on downsizing the federal workforce.

Why does GAO say gaps in oversight matter for borrowers and government costs?

Without accuracy and call-quality assessments, Education lacks assurance that borrower records are correct and that servicers provide quality information. Inaccurate records can lead to incorrect billing or wrong repayment status, and continuing to pay for poor performance risks overpayment.

Oct 15, 2026

Uploaded by Bintang