WASHINGTON – The sudden departure of half the U.S. Department of Education’s workforce earlier this year sent shockwaves across higher education. College administrators were quick to voice concerns that the layoffs and buyouts would lead to significant disruptions in the system, potentially hindering their ability to assist students. Now, only a few months later, those concerns are rapidly turning into a harsh reality.
A newly released survey, published on May 21, sheds light on the first concrete signs that the federal financial aid system is starting to strain under the pressure. The survey, which was conducted by the National Association of Student Financial Aid Administrators, collected feedback from nearly 900 colleges and reveals an alarming trend: students who rely on federal financial aid to fund their education are facing mounting challenges in securing the support they need.
The results tell a troubling story. Hundreds of schools reported severe communication breakdowns, processing delays, and an overall decline in the federal support system. These findings are the first official indicators that the Education Department’s reduced workforce is having a direct and detrimental impact on the operation of the financial aid system.
According to the survey, more than 60% of colleges noticed a significant slowdown in the responsiveness of the Federal Student Aid office, the division of the Education Department tasked with overseeing financial assistance programs, including the sprawling $2 trillion federal student loan portfolio. Over 350 colleges reported that students were being left in the dark due to delayed or inaccurate communication from the department. The survey also revealed that nearly half of the colleges surveyed had experienced issues with federal loan servicing, causing even more distress for students already navigating the complexities of financial aid.
To make matters worse, many financial aid staffers at colleges have had to step in to cover the gaps left by the federal layoffs, working longer hours and taking on more responsibilities. Despite their best efforts, however, many schools reported that regional Federal Student Aid offices had completely shut down. This, combined with the outages of critical systems and failure to update important records, has left colleges struggling to maintain even the most basic functions of financial aid administration.
The survey results also paint a picture of frustration for both students and staff. College officials noted significant delays in phone support and email responses from the Federal Student Aid office. In some cases, schools have been unable to get in touch with the department at all since mid-March. The lack of federal support has raised serious concerns about the availability of essential contacts, leaving schools and students in a state of uncertainty.
Melanie Storey, president of the National Association of Student Financial Aid Administrators and a former Education Department official under both the Trump and Biden administrations, did not mince words when commenting on the survey results. Storey emphasized that the layoffs have already begun to negatively impact both students and colleges, warning that the situation could escalate if corrective action isn’t taken soon.
“It was unrealistic and reckless to believe that cutting half of the department’s staff without a clear plan for redistributing these vital tasks wouldn’t result in widespread disruption,” Storey said in a statement. “The Department of Education must act swiftly to address the issues before the damage becomes irreversible for students and schools.”
The Education Department, however, pushed back against the survey’s findings. In a statement, department spokeswoman Ellen Keast acknowledged the delays students have faced in completing the Free Application for Federal Student Aid (FAFSA) during the Biden administration. However, Keast claimed that under President Trump’s leadership, the department has worked to improve processes, claiming the administration has streamlined critical student aid functions. She pointed to changes such as fixing identity verification procedures and simplifying parent invitations while also ensuring that the 2026-27 FAFSA form remains on schedule.
Despite these reassurances, the reality on the ground for students and colleges suggests that the situation is far from resolved. The Education Department’s staffing cuts and lack of support have created a volatile environment, one that is leaving students unsure of how to proceed with their financial aid applications. Without swift intervention, the damage caused by these disruptions could persist for years to come, complicating the financial future for countless students across the country.
