Financial Aid Offices Cite Continued Delays, Issues With FSA After Workforce Reductions, According to New NASFAA Survey
By Maria Carrasco, NASFAA Staff Reporter
More institutions across the country are reporting noticeable changes in Federal Student Aid (FSA) responsiveness, communication, and processing timelines after mass layoffs at the Department of Education (ED), a new survey from NASFAA found.
Earlier in March, ED announced a reduction in force (RIF) of nearly half of the department’s staff, which is part of the Trump administration’s efforts to dissolve the department. So far, ED has stated that cuts to the department’s offices and programs “will not directly impact students and families.”
In an effort to understand how ED’s RIF and other cuts at the agency are affecting institutional operations, staffing, and student service, NASFAA surveyed members in May, which found that 59% of 904 institutions reported noticeable changes in FSA responsiveness, communication, or processing timelines.
Now, with NASFAA’s July follow-up survey, institutions are reporting that these conditions have not improved. To note, both the May and July 2025 surveys were distributed to NASFAA member institutions; however, the individual respondents are not necessarily the same across both surveys.
In July’s survey, 72% of 547 institutions reported noticeable delays or changes in FSA responsiveness since May 1, compared to before the March RIF. Additionally, 53% of institutions reported issues with federal call centers, 47% cited problems with the National Student Loan Data System (NSLDS), and 36% flagged disruptions with student loan servicing.
When respondents were asked if they encountered any new or increased service delays since May 1, compared to before ED’s RIF, 49% reported delays in Electronic Application to Participate in the Federal Student Aid Programs (e-App) processing, 32% reported delays in FAFSA and ISIR processing, and 23% reported delays in Common Origination and Disbursement (COD) processing.
Notably, many institutions are concerned about the impact ED’s RIF will have on students. In both May and July’s surveys, 48% of institutions ranked “impacts on students’ access to federal student aid” as their top concern.
Over half of institutions, 51%, said that students are reporting receiving confusing or delayed information from ED or FSA. That’s compared to 32% of institutions in May’s survey. One-third of institutions reported in the July survey that students have directly expressed concern or frustration, especially related to FAFSA processing and aid eligibility.
Institutions are also reporting that inquiries to aid offices have increased, with 60% of institutions reporting increased student questions specifically related to federal financial aid access, timing, or service issues. That’s compared to 45% of institutions in May’s survey. Over one-quarter of institutions have received more than 25 such inquiries since May, according to July’s survey.
As the July survey noted, these inquiries are in addition to typical inquiries or concerns related to ED and FSA services.
“While inquiry volume often increases during the summer, the timing may also reflect growing student awareness of federal changes, including recent legislation and reports of ED-related disruptions,” July’s survey report reads. “Institutions did not always indicate whether inquiries were directly tied to the RIF, but several noted student confusion about FAFSA processing and federal aid systems.”
Alongside the RIF, ED also dissolved several FSA regional offices. According to July’s survey, 43% of institutions confirmed that their FSA regional office has closed. And 39% of institutions reported that there are now gaps in support that those offices used to fill, with many institutions reporting they no longer know who to contact at FSA for a routine issue.
Many institutions are dealing with their own staffing and workload pressures as a result of the deep staffing reductions at ED. According to July’s survey, nearly one-quarter of institutions reported deferring tasks or redistributing responsibilities due to the RIF.
“With fewer federal staff available to resolve issues, institutional staff have had to take on added troubleshooting, repeated follow-up, and administrative workarounds, taking time away from direct service to students,” the survey reads.
NASFAA President and CEO Melanie Storey reacted to July’s survey results, saying these results “show the cracks in service and communications are widening” at ED, and “office operations in support of students and families are strained.”
“Financial aid administrators are resourceful and committed, but there’s only so much they can do to shield students from these disruptions,” Storey said. “If federal service channels don’t stabilize soon, the nation’s student aid system could become less accessible, less predictable, and less trusted — at the very moment students and families need it most.”
Publication Date: 8/20/2025
Anthony M | 8/22/2025 5:7:01 PM
We have been trying for over 2 weeks to reactivate a staff member's EdConnect access and also tried to report fraud cases/ID theft over a month ago. In both cases, we were bounced back and forth between offices, the situations were supposed to have been escalated, then we never heard back again. Conditions have definitely deteriorated.
Jonathan H | 8/20/2025 10:45:39 AM
This article highlights exactly what many institutions are experiencing firsthand. The mass layoffs at the Department of Education are not only straining schools but are creating real risks for students’ access to federal aid. Our institution had to escalate all the way to our federal senator just to get clarity on an outstanding letter of credit to be returned, despite receiving a written notice from FSA that the school was in good standing and there was no need for the Department to hold it. Emails and phone calls went unanswered for months, with no response, until the senator inquired.
Situations like ours underscore the growing challenges we are facing. When federal responsiveness and communication break down, institutions are forced to divert valuable time and resources to troubleshooting instead of serving students. The findings of NASFAA’s survey reflect a troubling reality: the student aid system is becoming harder to navigate, less predictable, and ultimately less equitable.
David S | 8/20/2025 10:33:59 AM
I understand NASFAA's decision not to touch on ED's reaction to these survey findings in this article; as reported in Inside Higher Ed, they were dismissive of all of this, accusing our profession of being biased and "peddling a false narrative." They instead take the opportunity to brag about the early rollout of the 26/27 FAFSA, ignoring the fact that all of the groundwork for righting that ship was done during the Biden administration by staff at ED and USDS who were all let go by the so-called Department of Government Efficiency.
This does not give me much faith that ED still sees us as partners in assisting students, nor will they seek input for best practices or what's working/not working. This is such a huge step backwards.
Jeff A | 8/20/2025 10:30:47 AM
I’ve actually had the opposite experience from what I’ve seen reflected in some of the recent survey feedback. In the past, I’ve waited five years for a program review report thad was straight-forward, several months for compliance audit (FAD) responses, and nearly a year for recertifications and e-App updates.
Under the current administration, though, I’ve seen a noticeable shift toward prompt and streamlined risk-based action where they focus resources on more challenging situtations and streamline the routine stuff where they normally unnecessarily focused way too much of their time and OUR time on matters where it was unwarranted.
An e-App update was acted on very quickly.
Communication about recertification requirements was clear, and I even received a follow-up two months before the due date asking if we needed assistance.
A compliance audit FAD was issued two weeks after submission. reasoinably stating a full report was (entirely) unnecessary (for one meaningless finding that in the past would have generated an immense response).
I also followed up on another e-App update that had been sitting untouched for eight months under the prior administration; within days of my inquiry, it was actively under review.
Based on these experiences, I do feel the survey may have been biased toward negative responses, particularly from individuals who haven’t had significant engagement with ED during this administration’s relatively short tenure.
David V | 8/20/2025 10:23:47 AM
I am new a Director at a small private university. The previous director submitted the renewal PPA back in December and we still haven't heard back. It took me a couple of months to get access to FSA Partner Connect, only to get more error messages when logging into NSLDS and FAFSA Portal. Never ending errors!
Jennifer B | 8/20/2025 8:58:45 AM
Agree! I submitted my renewal PPA back in December. I contacted FSA Case Teams several times. All they say is that it is that it has been assigned. I now need to make additional update but still pending the renewal approved. In addition had a regulatory question regarding the definition of a Veteran. It took months and 5 ED folks to answer. ED finally indicated they were going to need to update their guidance- still waiting to see it.
You must be logged in to comment on this page.