The Government Accountability Office spent nearly two years auditing how the Department of Education instructs its student loan servicers, and the headline finding is something any functioning leadership team already knows: talk to the people doing the work before you change the work.
The new GAO report found Education routinely skips early coordination with the companies servicing federal student loans, which together manage over $1.6 trillion for about 43 million borrowers.
GAO reviewed 68 change requests (the formal documents Education uses to direct the contractors it pays to service federal loans) issued between March 2020 and December 2024. All four servicers interviewed said instruction would improve if Education looped them in before, or immediately after, requesting a change.
Education acknowledged early coordination has value, then rejected GAO's recommendation to set formal criteria for when to do it.
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Why This Matters
When Education and its servicers spend months clarifying what a change actually requires, borrowers absorb the delay. One change request triggered six rounds of questions and answers over a 2-month period. Another — a marked-up rewrite of a servicer's original 300-plus page contract — took more than a year and a half to implement. Borrower advocates told GAO the fallout showed up as long hold times and undertrained customer service reps, exactly when borrowers needed answers most.
In one case, Education gave servicers a single business day's notice before publishing IDR payment counts on StudentAid.gov — leaving call centers unprepared for the wave of borrower questions that followed.
The Numbers
Five student loan servicers manage the portfolio:
- Nelnet - 12.07 million borrowers
- Aidvantage - 9.21 million borrowers
- MOHELA - 6.73 million borrowers
- Edfinancia l- 6.52 million borrowers
- CRI - 2.93 million borrowers
- 36% of change requests from fiscal years 2023 through 2025 were designated "emergency" or "quick pace", which are rush classifications. In fiscal year 2025 alone, it was 42%.
- Emergency status can cut a servicer's response window from 10 days to 2.
How This Connects
This is the same agency GAO recently flagged for halting its servicer oversight reviews and that the Inspector General found had cut 40% of its staff. The timing is not great: servicers are in the middle on the largest repayment overhaul in decades, including the court-ordered end of the SAVE plan and the launch of the Repayment Assistance Plan under the One Big Beautiful Bill Act.
Education says formal coordination criteria would slow it down, but the GAO is keeping the recommendation open. The real test is how cleanly servicers execute the repayment changes that took effect in July 2026 and whether the 2028 deadline to move off sunsetting plans arrives with fewer surprises than the last transition.
Education did hold a multi-day summit with servicers in September 2025 on the new repayment plans, so someone is reading the memos.
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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.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.