College financial aid hit with glitches and delays due to federal staffing cuts

The Education Department’s financial aid apparatus is cracking after the Trump administration imposed sweeping staff cuts, with some fearing that further deterioration could make it harder for students to secure the money they need to attend college.

After the cuts were implemented a month ago, calls have started to go unanswered, as have some emails and the systems that disburse student loans and grants are plagued with outages that are taking longer than usual to fix. College and university aid officers are reporting disruptions that are slowing down their ability to calculate financial aid offers and get timely answers about everything from adding academic programs to remaining eligible to receive federal aid.

Technical glitches are not unusual for the various platforms the government uses to manage federal financial aid dollars, but the frequency and duration are concerning, said Charles R. Mayfield, director of financial assistance at Northwest Missouri State University.

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Earlier this month, it took his team members almost a day to log in to the Student Aid Internet Gateway, a portal the Education Department uses to send colleges electronic files, including processed Free Application for Federal Student Aid (FAFSA) forms needed to make financial aid offers. They learned they were not alone, after posing questions about the outage on an email group run by the Federal Student Aid office. There, colleges nationwide complained of having similar problems accessing student records and of getting a boilerplate message from the help desk confirming the problems but providing no other information.

Days later, it happened again.

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Mayfield said team members spent a few hours trying before they were able to access the portal. Other systems, he said, have also become increasingly difficult to access, including a database that houses student loan information, and another that handles the origination and disbursement of loans, and the Pell Grant for undergraduates with exceptional financial need.

“The consistency and stability of these systems are a growing concern,” Mayfield said. “It’s not a major delay by itself, but still it means it will take longer for us to process a student’s FAFSA record, loan record or Pell award.”

The Education Department oversees the $1.6 trillion student loan program - its single biggest financial responsibility - and it runs the Pell Grant program for low-income college students.

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Education Department spokesperson Madi Biedermann said there have been no “prolonged outages” in the past 60 days but didn’t clarify what is considered prolonged.

“When significant issues arise within federal student aid systems that affect multiple users, the department acts swiftly to resolve them, communicates promptly with financial aid partners, and implements system adjustments as needed,” she said.

The Trump administration laid off more than 1,300 employees at the Education Department in early March, including tech staffers who routinely identified and fixed glitches and outages. The departure of those workers has slowed the response time and coordination needed to resolve problems, according to three people familiar with the matter who spoke on the condition of anonymity because they were not authorized to speak publicly.

Even though some of those tech staffers have been reinstated, these people said there aren’t enough workers to mitigate problems and manage the department’s sprawling infrastructure. Current and former Education Department employees say the disruptions are only the beginning and are likely to get worse for colleges, students and borrowers.

“We will see issues wherein these complex, intertwined technology systems cannot be adequately managed because so many of the people experienced in identifying and resolving incidents will have left,” Colleen Campbell, who resigned as executive director of the Office of Loan Portfolio Management, said in testimony for a lawsuit seeking to block the department layoffs. “This puts critical functions, like the FAFSA, aid disbursement, and loan repayment at risk.”

Because of the troubled rollout of the 2024-25 FAFSA, which was riddled with technical errors and delays, financial aid officers at colleges worry the staffing cuts could throw the application process back into chaos. When online access to the form went in and out for four hours the day after the layoffs, some took it as a harbinger of things to come. But since that incident, there haven’t been any major FAFSA disruptions.

“There is a little trepidation,” said Paula Carpenter, director of financial aid at Jefferson College in Missouri. “We have this new era of change and uncertainty that’s kind of putting us back in flux as we were over the past couple of years.”

With layoffs and resignations, the office that oversees federal student aid lost nearly half of its staff - people who made sure schools comply with the rules to receive aid, people who kept an eye on college finances and people who monitored the contractors managing the government’s $1.6 trillion student loan portfolio. In their absence, some college aid officers say it’s been harder to get ahold of anyone to answer questions or offer guidance.

Michelle Brown at the Finger Lakes Health College of Nursing & Health Sciences in Upstate New York has been waiting five weeks for confirmation that FSA’s School Eligibility and Oversight group received her response to an audit finding. She worries that missing the deadline could put the school at risk of losing eligibility for financial aid, which would be devastating to students who need federal dollars to afford college.

The number of federal workers in the oversight group, which monitors colleges participating in the student aid programs, dropped from 142 unionized employees to 35, with all but two of its eight regional offices closed.

Brown’s case manager was among those in the shuttered New York office who were laid off, according to union records. But she had no idea and kept sending emails that never bounced back. She tried the email address the department set up to field questions and got an automated message saying her case would be reviewed by the next available person and warning to expect delays.

“We beat the deadline for submitting our response by several weeks because we want to be in compliance, but our case manager is gone, and no one is helping,” Brown said. “I don’t want this to jeopardize our students’ access to financial aid.”

Two former employees said that before the staffing cuts, the oversight group had a backlog of 1,600 applications from colleges trying to become or remain eligible to participate in the aid program. If colleges are not approved to receive federal financial aid, their students cannot use federal loans and grants to cover their costs. Another arm of the group, which analyzes schools’ finances, had a backlog of 800 cases, according to the testimony of Chris Miller, who ran the Atlanta division that closed.

The Education Department did not respond to questions about how it will address the backlog with a diminished staff. In a letter to education groups on March 14, James Bergeron, acting undersecretary for the Education Department, said program reviews, participation agreements and other “important functions” handled by the regional offices and staff are being transferred to other offices and experts.

Karen McCarthy, vice president of public policy and federal relations at the National Association of Student Financial Aid Administrators, said there were long-standing concerns about inadequate staffing in the oversight group that have been compounded by the spate of cuts.

“Even before all of this happened, going back years, decisions and approvals were taking longer than ideal for schools, and were kind of unpredictable,” McCarthy said. “I don’t expect that, at least in the near term, will get better and may possibly get worse.”