RESOLVING THE LEDGER
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See the full story · 1 sourcesStudent-loan servicers said they would benefit from better coordination with the Department of Education. Al Drago/Getty Images
A new GAO report said that student-loan servicers struggle to implement changes from the Education Department.
The coordination challenges could lead to delays in communicating payment information to borrowers.
The Education Department disagreed with the GAO's recommendation to establish communication criteria.
Your student-loan servicer wants more help carrying out the sweeping changes from the Department of Education.
The Government Accountability Office released a report on Thursday that delved into the coordination between four federal student-loan servicers and the Education Department. It found that the servicers — Nelnet, Aidvantage, MOHELA, and EdFinancial — reported challenges implementing program changes from the department, citing a "lack of clear up-front instruction" that has sometimes led to "extensive back-and-forth," the report said.
The lack of clear instructions has caused delays in communicating with borrowers, leading to administrative errors and incorrect billing information that take time for the servicer to remedy.
"The instruction Education provides to servicers on changes to the student loan program is critical to ensuring smooth operations and good customer service for these borrowers," the report said.
The GAO recommended that the Federal Student Aid office develop criteria for determining when it should initiate early conversations with servicers to prepare for coming changes, particularly those that are complex or need to be implemented within a tight timeframe.
One servicer told the GAO that the department gave it one business day to update how borrowers can track their total number of payments toward loan forgiveness, leaving insufficient time to prepare for an influx of calls about the change.
The Education Department said in its response to the GAO's report that it disagreed with the recommendation to develop criteria for early coordination with servicers. Mell Brittian-Smith, acting executive director of the Office of Loan Portfolio Management, said that establishing a formal criterion would "be fraught with challenges and risks," given that complexity for loan and repayment changes can vary.
"The Department coordinates with the servicers as quickly as possible given the available timeframes and other qualitative criteria pertaining to the change," Brittian-Smith said.
A department official also told the GAO in December 2025 that it proactively requested input from servicers on draft changes related to new repayment plans, allowing the department to revise requests and ease the implementation process.
Over the past month, federal servicers have been tasked with implementing President Donald Trump's sweeping student-loan repayment overhaul, which included new income-driven repayment plans and borrowing caps. Borrowers have reported a range of challenges related to the changes, including incorrect payment information and long hold times with customer service.
Servicer challenges, however, predate the Trump administration. Under former President Joe Biden, servicers were tasked with facilitating a return to repayment following the pandemic-era pause. Biden's Education Department later penalized servicers for failing to meet their contractual obligations, including delivering inaccurate billing statements to borrowers.
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