Federal oversight protects student borrowers. Some of it has stopped, watchdog says

"If servicers' records are inaccurate, borrowers could, for instance, be placed in the wrong loan repayment status, billed for incorrect amounts, or not have a refund processed in time. Similarly, FSA has not monitored calls since February 2025, so there is a risk that borrowers have received or will receive incorrect information and poor customer service."

"FSA is supposed to conduct quarterly reviews, according to its contracts with loan servicers. These reviews include comparing loan servicers' borrower records with FSA's own records, to screen for gaps or discrepancies, as well as targeted reviews of borrowers in specific situations, including those who request temporary relief from their payments."

The Government Accountability Office reported that the Office of Federal Student Aid stopped conducting quarterly reviews of loan servicers' records and ceased monitoring borrower service calls in February 2025. These oversight activities were required by servicer contracts and designed to ensure accuracy and quality service. Without these reviews, borrowers face risks including incorrect loan repayment status placement, wrong billing amounts, delayed refunds, and receipt of inaccurate information. The GAO investigation was requested by House and Senate education committee leaders. Officials cited labor-intensive processes as reasons for discontinuing the more demanding oversight activities, though other automated oversight measures continue.

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