Sen. Elizabeth Warren is asking the Government Accountability Office to investigate whether the Trump administration’s staffing cuts at the U.S. Department of Education have hobbled the agency’s ability to stop fraud, waste, and abuse of federal student aid funds.
Why It Matters: Federal Student Aid (FSA) is the office responsible for monitoring colleges that receive Title IV funds: the money that finances Pell Grants, federal student loans, and work-study. If oversight has weakened, taxpayers and students both pick up the tab when colleges misuse aid or misrepresent their programs to prospective enrollees.
While there have been headlines about cracking down on ghost students, there are still other types of financial aid fraud and waste that can happen.
By The Numbers
- ED has laid off roughly half of its workforce since January 2025.
- FSA alone lost about 46% of its employees, per a March 2026 GAO report (PDF File).
- The majority of FSA regional offices that conducted college program reviews were eliminated.
- However, it appears that FSA is hiring back upwards of 380 positions that are needed.
What Warren Is Asking: In a May 20 letter to Acting Comptroller General Orice Williams Brown (PDF File), Warren requested that GAO quantify the potential dollar cost to the government from reduced oversight, including drops in financial penalties on schools and reductions in identified repayments owed by colleges. She also wants data on how many program reviews, investigations, and enforcement actions ED has opened since the cuts, broken down by institution type.
Concerns Over For-Profit Schools: Warren flagged for-profit colleges as a particular concern. Under the Biden administration, for-profit colleges saw the majority of FSA’s enforcement actions. She argued reduced oversight is more troubling given recent Trump administration policies poised to expand the for-profit sector, including the upcoming rollout of Workforce Pell (which extends Pell Grant eligibility to short-term programs) and the rollback of financial accountability rules for corporate college owners.
How This Connects: Federal Student Aid distributes more than $120 billion in aid each year across Pell Grants, federal student loans, and other aid programs. Borrower defense to repayment (the program that erases loans for students defrauded by their colleges) has already cost the government billions in discharges tied to past for-profit collapses such as Corinthian Colleges and ITT Tech. When oversight gaps let misconduct go undetected longer, the eventual bill for discharges and recovery actions lands on taxpayers and, in many cases, the borrowers who were misled in the first place.
What Happens Next: GAO will decide whether to open the investigation. Even if it accepts the request, full audits typically take 12 to 18 months. Workforce Pell is on track to take effect this summer, opening a new federal revenue stream for short-term for-profit programs while ED’s enforcement capacity remains diminished.
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Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
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