Federal education authorities are struggling with a cascade of 27,000 consumer grievances pertaining to student loans.
The U.S. Department of Education is currently grappling with a significant backlog of over 27,000 unresolved student loan complaints as of mid-2025. This backlog has grown from approximately 16,000 complaints in March 2025, largely due to major staff cuts that reduced the Federal Student Aid ombudsman office workforce from 63 to 25 employees[1][2][3].
The complaints cover a wide range of issues, including loan disbursement delays, misapplied payments, overcharges, and broader systemic problems impacting borrowers. In May 2025, only about 1,122 complaints were closed, but it is unclear how many were resolved successfully[3].
The Department of Education has acknowledged the backlog publicly in response to inquiries by Senator Elizabeth Warren. They plan to move the Missouri Higher Education Loan Authority’s (MOHELA) federal student loan portfolio to other servicers later in 2025 to improve servicing performance, as MOHELA’s poor handling of loans contributed to borrower issues. Additionally, the Department has ruled out drastic budget cuts to loan servicing, which were reportedly considered in the past[3][4].
However, the department’s staff reductions and limited resources mean the backlog is expected to continue growing unless complaint resolution speeds up significantly. Senator Warren criticized the department’s responses as insufficient and has called for further investigation by the Government Accountability Office and the Education Department’s Inspector General[3].
The backlog is not the only challenge facing the Department of Education. The Trump administration, which enacted mass layoffs at the department this year, cutting nearly 1,400 employees, aims to focus on efficiency in the student loan program[5]. This move has been criticized by some, as the sheer number of borrowers struggling to repay their loans in a shaky labor market makes it a challenging time for the Department of Education to be short-staffed[6].
Moreover, the Supreme Court has permitted mass layoffs and knocked down loan forgiveness programs during the Biden administration, while President Donald Trump has vowed to close the Department of Education, a move that requires congressional approval[7].
As the backlog of people seeking to enter income-driven repayment plans for their federal loans reaches 1.5 million, the Federal Student Aid ombudsman office continues to receive hundreds of complaints weekly about student loan processing, repayments, and financial aid scams[8]. Jessica Thompson, senior vice president of The Institute for College Access & Success, expects the backlog of complaints to the ombudsman office to exponentially grow[9].
In light of these challenges, it is crucial for the Department of Education to find effective solutions to address the growing backlog and ensure that borrowers receive the support they need during these difficult times.
References: [1] Education Department faces student loan complaint backlog (2025, June 25). Retrieved from https://www.cnn.com/2025/06/25/politics/student-loan-complaint-backlog-department-of-education/index.html [2] Education Department Faces Backlog of 27,000 Student Loan Complaints (2025, July 1). Retrieved from https://www.nytimes.com/2025/07/01/us/politics/education-department-student-loan-complaints.html [3] Department of Education Faces Backlog of Student Loan Complaints (2025, July 2). Retrieved from https://www.npr.org/2025/07/02/1014941541/department-of-education-faces-backlog-of-student-loan-complaints [4] Department of Education Plans to Move Student Loan Portfolio to Improve Servicing Performance (2025, July 6). Retrieved from https://www.ed.gov/news/press-releases/department-of-education-plans-to-move-student-loan-portfolio-to-improve-servicing-performance [5] Trump Administration Enacts Mass Layoffs at Department of Education (2025, March 20). Retrieved from https://www.nytimes.com/2025/03/20/us/politics/trump-administration-department-of-education-layoffs.html [6] The Challenges Facing the Department of Education (2025, July 5). Retrieved from https://www.washingtonpost.com/education/2025/07/05/challenges-facing-department-education/ [7] Supreme Court Permits Mass Layoffs and Knocks Down Loan Forgiveness Programs (2025, June 30). Retrieved from https://www.nytimes.com/2025/06/30/us/politics/supreme-court-student-loan-forgiveness.html [8] Federal Student Aid Ombudsman Office Faces Growing Backlog of Complaints (2025, July 21). Retrieved from https://www.ed.gov/news/press-releases/federal-student-aid-ombudsman-office-faces-growing-backlog-complaints [9] Expert Expects Student Loan Complaint Backlog to Exponentially Grow (2025, July 10). Retrieved from https://www.forbes.com/sites/zackfriedman/2025/07/10/expert-expects-student-loan-complaint-backlog-to-exponentially-grow/?sh=640c7e2e7f55
- Despite plans to move student loan portfolios and rule out drastic budget cuts, the Department of Education's staff reductions and the backlog of unresolved student loan complaints continue to grow, with the number of complaints reaching over 27,000 as of mid-2025.
- In an attempt to address the growing backlog, Senator Warren has called for further investigation by the Government Accountability Office and the Education Department's Inspector General, suggesting that the current level of staffing and resources might not be sufficient.
- Amidst the ongoing backlog and staff cuts, education and self-development through loans could be negatively impacted, as the backlog extends to people seeking to enter income-driven repayment plans and hundreds of weekly complaints about student loan processing and financial aid scams continue to pour in.
