GAO tells House committee Education’s staff cuts reduced oversight of loan servicers

Melissa Emery Arris, director of the education, workforce and income security team at the Government Accountability Office, told the House Committee on Education and Workforce that staffing reductions at the Department of Education diminished oversight of student loan servicers.

"We found that between January and December, FSA lost about half of its staff, specifically 46%. That constituted a drop of 656 staff members," Arris said. GAO reported Education stopped assessing two key servicer performance metrics—accuracy and call quality—because of staff shortages. Those assessments were intended to ensure servicers kept accurate borrower records and provided effective customer service.

Arris also said the department closed or reduced regional Office for Civil Rights operations, noting the agency paid staff on leave during restructuring; GAO estimated the cost of paying those employees while they could not work at roughly $28.5 million to $38 million.

Committee members pressed GAO and witnesses about the department’s March 2025 decision to transfer defaulted loan management to the Treasury Department and asked whether that shift would affect borrowers’ access to subject‑matter expertise. GAO said it had not yet studied the operational consequences of that transfer and requested additional information.

Multiple members asked GAO to provide further documentation and to follow up on whether students in default might be eligible for discharges or other relief that could be missed without strong oversight. The committee left the record open for 14 days and requested GAO and Education provide additional data and briefings.