{"id":42059,"date":"2026-03-12T15:31:17","date_gmt":"2026-03-12T15:31:17","guid":{"rendered":"https:\/\/financialrush.com\/?p=42059"},"modified":"2026-03-12T15:31:17","modified_gmt":"2026-03-12T15:31:17","slug":"student-loan-servicers-face-less-oversight-under-trump-gao","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=42059","title":{"rendered":"Student loan servicers face less oversight under Trump: GAO"},"content":{"rendered":"<p> \n<\/p>\n<div id=\"RegularArticle-ArticleBody-5\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"\/><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-108112152\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>A school bell from Milford, Pennsylvania, stands in front of the Department of Education\u2019s headquarters on March 06, 2025 in Washington, DC.\u00a0<\/p>\n<p>Chip Somodevilla | Getty Images News | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>The <a href=\"https:\/\/www.cnbc.com\/2025\/03\/06\/student-loan-borrowers-in-the-dark-as-trump-targets-education-dept.html\">U.S. Department of Education<\/a> has <a href=\"https:\/\/www.cnbc.com\/2025\/11\/20\/worries-for-student-loan-borrowers-amid-education-department-breakup-.html\">scaled back its oversight<\/a> of the companies that manage federal student loans, a new congressional watchdog <a href=\"https:\/\/www.gao.gov\/products\/gao-26-108534\" target=\"_blank\">report<\/a> found.<\/p>\n<p>In February 2025, the department stopped \u201cassessing servicers on accuracy and call quality,\u201d according to the report from the nonpartisan Government Accountability Office. That change occurred shortly before the Trump administration <a href=\"https:\/\/www.ed.gov\/about\/news\/press-release\/us-department-of-education-initiates-reduction-force\" target=\"_blank\">terminated<\/a> around 50% of the Education Department\u2019s staff. <\/p>\n<p>Without its evaluation of student loan servicers, the GAO wrote, the Education Department \u201ccan\u2019t be sure that borrower records are correct and servicers are giving borrowers quality information.\u201d The office also said that borrowers could be placed into the wrong repayment status or overbilled as a result. <\/p>\n<p>\u201cInstead of providing relief to 43 million Americans who are drowning in student debt, the Trump Administration has made it harder for them to understand how much they owe and how long it will take to pay back,\u201d said Sen. Bernie Sanders, I-Vt., in a statement. Sanders was among the lawmakers who requested the GAO investigation. <\/p>\n<p>The Education Department did not immediately respond to a request for comment. <\/p>\n<\/div>\n<div class=\"group\">\n<div class=\"RelatedContent-relatedContent\" id=\"RegularArticle-RelatedContent-1\">\n<div class=\"RelatedContent-container\">\n<div class=\"RelatedContent-nonCollapsibleContent\">\n<h2 id=\"read-more-cnbc-personal-finance-coverage\" class=\"RelatedContent-header\">Read more CNBC personal finance coverage<\/h2>\n<div class=\"group\">\n<ul>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/12\/student-loan-oversight-trump-gao.html\">Trump administration has scaled back oversight of student loan servicers: GAO<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/11\/social-security-cola-oil-prices.html\">Social Security 2027 COLA forecast may rise with high oil prices<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/11\/personal-loan-credit-card-debt-consolidation.html\">You can\u2019t \u2018borrow your way out of debt,\u2019 expert says, but more people are trying<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/11\/cpi-inflation-february-2026-breakdown.html\">Here\u2019s the inflation breakdown for February 2026 \u2014 in one chart<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/10\/save-plan-for-student-loan-borrowers-is-over-federal-appeals-court-.html\">SAVE plan used by millions of student loan borrowers is over, court orders<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/10\/identity-theft-taxes.html\">Identity theft and your taxes: It\u2019s \u2018a terrible reverse lottery,\u2019 one victim says<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/10\/iran-war-spikes-oil-prices-consumers.html\">As Iran war disrupts oil prices, consumers could be \u2018hammered,\u2019 economist says<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/09\/million-dollar-earners-social-security-2026.html\">Million-dollar earners have already stopped paying into Social Security for 2026<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/09\/k-shaped-economy-women.html\">Women and the K-shaped economy: Lower pay, affordability issues reduce spending<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/09\/401k-auto-portability-roth.html\">Small 401(k) accounts may follow workers to their next job \u2014 except Roth money<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/08\/jobs-apocalypse-ai-proof-skilled-trades.html\">In a jobs apocalypse, look to \u2018AI-proof\u2019 skilled trades, career experts say<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/07\/median-income-households-buying-power.html\">Middle-income homebuyers have $30,000 more buying power than a year ago<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/06\/average-irs-tax-refund.html\">Average IRS tax refund is up 10.6%, early filing data shows<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/06\/gop-big-beautiful-bill-to-deal-shock-to-the-aca-marketplace.html\">GOP \u2018big beautiful bill\u2019 to deal \u2018shock\u2019 to the ACA marketplace: health experts<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2026\/03\/06\/trump-no-tax-on-overtime.html\">As millions claim Trump\u2019s \u2018no tax on overtime\u2019 deduction, filers risk mistakes<\/a><\/li>\n<li><a href=\"https:\/\/www.cnbc.com\/2025\/10\/01\/best-financial-advisors.html\">CNBC\u2019s Financial Advisor 100: Best financial advisors, top firms ranked<\/a><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<h2 id=\"student-loan-servicers-have-a-spotty-history\" class=\"ArticleBody-subtitle\"><a id=\"headline0\"\/>Student loan servicers have a spotty history <\/h2>\n<div class=\"group\">\n<p>The Education Department contracts with different companies to service its federal student loan portfolio. It pays these companies more than $1 billion a year to manage borrowers\u2019 accounts, according to higher education expert Mark Kantrowitz.<\/p>\n<p>The servicers process borrowers\u2019 loan payments, supply information to borrowers and help them access repayment plans and forgiveness opportunities. <\/p>\n<p>The Federal Student Aid Office at the Education Department managed the assessments of these student loan servicers. However, the Trump administration has reduced the staff at FSA to 777 people from 1,433, GAO said. <\/p>\n<p>Student loan servicers have long faced criticism from <a href=\"https:\/\/protectborrowers.org\/what-we-do\/federal-student-loans\/federal-loan-servicing-abuse\/mohela\/\" target=\"_blank\">advocates<\/a> and <a href=\"https:\/\/www.warren.senate.gov\/newsroom\/news-coverage\/cnbc-student-loan-servicer-transfer-led-to-millions-of-consumer-credit-reporting-errors-lawmakers\" target=\"_blank\">lawmakers<\/a> for misleading borrowers or failing to provide them with sufficient support. <\/p>\n<p>\u201cWithout oversight to ensure that loan servicers provide borrowers with correct information, borrowers may make decisions that negatively impact their finances, such as choosing the wrong repayment plan, not qualifying for forgiveness and defaulting on their student loans,\u201d Kantrowitz said. <\/p>\n<\/div>\n<div class=\"group\">\n<p>The Biden administration <a href=\"https:\/\/www.cnbc.com\/2023\/10\/30\/education-dept-penalizes-student-loan-servicer-mohela-for-errors.html\">withheld<\/a> $7.2 million in payment from Mohela in 2023 <a href=\"https:\/\/www.cnbc.com\/2023\/10\/22\/student-loan-borrowers-restart-bills-in-a-very-messy-system.html\">for not sending timely billing statements<\/a>\u00a0to 2.5 million borrowers, resulting in more than 800,000 borrowers becoming delinquent. <\/p>\n<p>In 2017, days before Trump took office, the\u00a0Consumer Financial Protection Bureau\u00a0<a href=\"https:\/\/www.cnbc.com\/2024\/09\/12\/navient-reaches-120-million-settlement-with-cfpb-for-misleading-student-loan-borrowers.html\">sued<\/a> Navient. It accused the then-servicer of steering student loan borrowers away from affordable repayment plans and into expensive forbearances, which caused many <a href=\"https:\/\/www.cnbc.com\/2026\/02\/26\/navient-settlement-checks-student-loans.html\">to incur steep interest charges<\/a>. <\/p>\n<p>Navient stopped servicing federal loans in 2021 and, in 2024, reached a $120 million settlement with the CFPB. As part of that deal, the CFPB banned the company from ever again managing federal student loans. <\/p>\n<p>Mohela and Navient did not immediately respond to a request for comment. <\/p>\n<\/div>\n<div class=\"ArticleBody-googlePreferredSourceContainer\" data-module=\"GooglePreferredSource\" data-id=\"RegularArticle-GooglePreferredSource-5\"><a href=\"https:\/\/www.google.com\/preferences\/source?q=https:\/\/www.cnbc.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.<\/a><\/div>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.cnbc.com\/2026\/03\/12\/student-loan-oversight-trump-gao.html\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"A school bell from Milford, Pennsylvania, stands in front of the Department of Education\u2019s headquarters on March 06,&hellip;\n","protected":false},"author":3,"featured_media":42060,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-42059","post","type-post","status-publish","format-standard","has-post-thumbnail","category-investing","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/42059","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=42059"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/42059\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/42060"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42059"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42059"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42059"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}