Complaints about the Office of Federal Student Aid’s operations have increased significantly over the past few months, according to the latest edition of a survey from the National Association of Student Financial Aid Administrators. Challenges that were once just kinks behind the scenes are evolving to become student-facing issues on the front line, the association says.
The share of institutions reporting disruptions to communication, responsiveness or processing timelines rose from 59 percent in May to 72 percent in July. Meanwhile, the share of aid offices reporting student confusion about the process increased from 32 percent to 51 percent.
The report, which is based on responses from financial aid officers at more than 500 NASFAA member institutions across the country, builds upon a similar survey conducted in May. It shows rising frustration with the FSA, despite the agency’s attempt to rehire about 50 of the more than 300 employees laid off earlier this year.
“I wasn’t overly surprised” by the data, said NASFAA president Melanie Storey. “But it was largely a disappointment that the trajectory is moving in the wrong direction.”
She added that the new loan caps and repayment plan changes detailed in President Trump’s One Big Beautiful Bill Act could compound the damage, creating long-term consequences for college attainment rates.
Given the “fissures and cracks around trust in higher education, we need to eliminate barriers and support students clearly and consistently—and that includes helping them figure out how they’re going to finance their higher education,” Storey said. “If this trajectory continues, I’m really concerned about the decisions that students and families are going to be able to make to enroll in postsecondary education.”
An Education Department official called the NASFAA report inaccurate and accused the organization of “peddling a false narrative to preserve the status quo.”
“It is an embarrassment for NASFAA to release a ‘survey’ that blatantly parrots falsehoods and is not representative of the higher education community nor the American people’s overwhelming charge for change,” deputy press secretary Ellen Keast said in an email to Inside Higher Ed. “While NASFAA stands idly by ready to see us fail, the Trump Administration has just launched the earliest FAFSA form ever, which they are well aware of and decided to ignore.”
Storey responded that NASFAA has tried repeatedly to partner with the administration in their “shared goal of serving students,” applauding efforts such as FAFSA beta testing.
But to dismiss the survey results as “fabricated or political undermines the expertise of those working directly with students every day, eager to deliver on the promise of postsecondary education, and shows that the administration is not interested in working with experts in the field to achieve the best results for students; instead, it is focused on advancing its own agenda,” she said.
Worsening Outcomes
It’s been an eventful few months for the FSA. Mass layoffs throughout the department, first announced in March, quickly faced legal challenges; in May, a district court temporarily blocked the executive action. But any hopes that the staffing shortage would be resolved were squashed when the Supreme Court overturned the lower court’s ruling in July. And while the justices have yet to hear the full case or issue a final ruling, the order allows Education Secretary Linda McMahon to proceed with the pink slips.
Storey said that some of the increased frustration and concern higher ed officials expressed in the survey may be related to timing; the district court ruling spurred cautious optimism in May, which had largely tanked by July. Similarly, the repercussions of staffing shortages were not necessarily evident in May but are now becoming clear. She also noted that the mounting discontent could simply be a reflection of the cyclical nature of student aid and the imminent start of the new academic year.
Either way, the survey suggests that FSA operations are flagging, and many NASFAA members say it’s preventing them from properly processing aid. For example, 63 percent of institutions that have submitted their E-App—a form that must be completed and approved in order to receive federal aid—said their submission had yet to be processed in July.
Department officials argue that this data is biased due to NASFAA’s survey method. They point specifically to the sample size, saying that the 500 institutions represented are predominantly nonprofit or public institutions, reflecting only a sliver of the more than 5,000 that FSA works with—and are the ones most likely to harbor anti-Trump sentiments.
The department also described the survey’s questions as biased toward the negative and said it was conducted just as the department finished updating its Partner Connect Portal to address various complaints, meaning the results don’t accurately reflect the new changes.
But Storey stood by her view that most of the challenges financial aid offices face today are the same as those they reported in May, only worse, and with longer delays in response time.
For example, previous Inside Higher Ed reporting shows that when students hit a wall and cannot log in to the FAFSA application portal, college advisers struggle to reach the central processing system that manages user IDs. While a department spokesperson said all help lines remain fully open, multiple college and NASFAA representatives say they have been unable to get through at certain times.
The latest survey shows this is still a major problem. More than half of institutions reported issues with federal call centers, and more than 40 percent cited problems with the National Student Loan Data System. In addition, over a third flagged disruptions with student loan servicing. Collectively, the NASFAA report said, these failures affect colleges’ ability to resolve aid issues for students in real time.
Once the delays start to hit students—which is happening more and more often, according to NASFAA’s report—it could leave them without access to loans and therefore unable to pay their bills and stay enrolled. Although colleges can grant students extensions for tuition payments or on-campus housing fees, they can’t change when off-campus rent or childcare payments are due. Situations like these often force students to take a job and attempt to pay off their debt with some college but no degree.
So unless FSA addresses its shortcomings, Storey said, the impact could be far-reaching.
“It’s a compounding of issues and uncertainties that I think could have a long-lasting and significant impact on postsecondary enrollment and financing,” she said.
