A key office within the U.S. Department of Education, responsible for resolving student loan complaints, is currently managing a backlog of over 27,000 unresolved cases, according to newly released figures. The Federal Student Aid (FSA) ombudsman group, which handles borrower grievances related to loan servicing, disbursement issues, and financial aid fraud, has seen its Staffing Shortages by nearly two-thirds since earlier this year.
The data, disclosed in a letter to the Senate on July 21, highlights how the office closed just over 1,100 complaints in May, the most recent month with available figures. At the current pace, education experts are concerned that the backlog may continue to grow in the months ahead, particularly during a period of transition in federal student aid policies.
Staffing Shortages Capacity Hinders Complaint Resolution
The ombudsman’s office has seen its workforce shrink from 63 employees to 25 since mid-March. During the same period, the number of unresolved complaints increased by more than 11,000. Many of the issues brought forward by borrowers involve difficulties such as missing disbursements, inaccurate payment processing, and confusion over eligibility for repayment programs.
The office serves as a direct point of contact not only for students and parents, but also for loan servicers, members of Congress relaying constituent concerns, and third-party vendors. According to court documents filed by a former department employee, the complaint backlog stood at 16,000 in mid-March before escalating rapidly.
Loan Servicing Challenges Intensify After Repayment Restart
The increase in complaints follows several shifts in the federal student loan system over the past two years. After a long pause on payments during the COVID-19 pandemic, repayments resumed in 2024. This transition led to a significant rise in borrower inquiries and technical challenges as loan servicers resumed operations and implemented new repayment options.
Issues related to income-driven repayment (IDR) plans have also added to the complexity. These plans cap monthly student loan payments based on a borrower’s income, but nearly 1.5 million pending applications for IDR remain unresolved as of mid-2025. Delays in processing these applications have left many borrowers uncertain about their repayment status and monthly obligations.
According to education experts, the ombudsman office plays a critical role during such transitional phases, identifying system-wide issues, communicating with loan servicers, and helping individual borrowers find resolutions.
Impact on Borrowers and System Efficiency
Jessica Thompson, senior vice president at The Institute for College Access & Success (TICAS), expressed concern about the growing burden on borrowers. She emphasized that delays in resolving complaints can cause confusion and financial hardship, especially when students are trying to correct billing errors, access income-based repayment options, or address overpayment concerns.
“The complaints coming in now are often from borrowers in urgent need of assistance,” she said. “When those cases are left unresolved, it can negatively affect their financial stability and trust in the system.”
Additionally, with reduced staff, the ombudsman office may be less able to track recurring trends or systemic issues within the federal loan system; tasks that are vital to improving long-term program efficiency.
Department Responds with Streamlining Strategy
In its July letter to Congress, the Department of Education stated it is working to streamline federal aid programs by improving accountability and reducing administrative overhead. The department emphasized its goal of focusing on delivering core programs as defined by existing federal statutes.
Still, student advocates note that such reforms must be matched with operational support to ensure borrowers have access to timely assistance.
With tens of thousands of complaints and millions of borrowers navigating repayment options, education policy experts agree that the current moment presents one of the most complex and demanding challenges in the history of the federal student loan program.
What Borrowers Can Do:
- If you are facing an unresolved student loan issue, you can file a complaint with the FSA Ombudsman via StudentAid.gov.
- Borrowers are also encouraged to document all communication with loan servicers and to keep personal records of billing and payment history.
- For general questions or updates, borrowers can access the Department of Education’s official helpline or consult a certified financial aid counselor.
Also Read :- Federal Student Loan Collections to Resume in May After Four-Year Pause