OIG Review Reveals RIF Impact at FSA
By Maria Carrasco, NASFAA Staff Reporter
A recent review by the Department of Education’s (ED) Office of Inspector General (OIG) reveals the impact of the Trump administration's efforts to dismantle the department, with specific numbers of how many employees have left Federal Student Aid (FSA).
This review, conducted by OIG covers changes in ED’s staffing, operations, contracts, and grants from January 20, 2025, through March 31, 2025, when the Trump administration began its efforts to dismantle the department. With this review, OIG noted that there was a scope limitation due to ED not providing all requested information and “unfettered access” to department staff.
Overall, OIG found that the administration’s reduction in force (RIF) resulted in staffing changes in 16 of ED’s 17 offices. ED saw a 40% decrease in its workforce, with an overall reduction of at least 1,579 of its 3,902 employees.
A majority of those employees were separated by ED’s RIF, with OIG finding 1,227 employees were separated by RIF actions, and at least 352 employees voluntarily separated through other options.
OIG’s review also examined changes in ED grants, with the office finding the department:
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Terminated 90 grants with total obligations totaling $504 million;
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Identified 223 additional grants totaling $252 million for termination;
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Moved 84 grants totaling $316 million in obligated funds to closeout;
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Awarded 15 new grants totaling $22 million;
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And modified the terms and conditions of 21 grants totaling $18 million awarded to 2 grantees.
When it comes to contracts, the OIG review found that ED:
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Terminated 129 contracts with a total value of $1.3 billion;
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Descoped an additional 27 contracts;
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Awarded 77 new contracts with a total value of $610.4 million;
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And reversed 3 previously terminated contracts with a total value of $100.2 million.
The review also looked at staffing at FSA from January through March 2025. As of January 20, 2025, FSA had 1,446 employees within 136 suboffices.
But, as of March 11, 2025 – roughly two months later – 72 of FSA’s suboffices, which consisted of 918 employees, were impacted by ED’s RIF effort, resulting in “at least” a 40% reduction in FSA staff. OIG specified that from these 72 suboffices, 411 employees were separated through the RIF and another 174 separated through other means between January 20, 2025, and March 31, 2025. OIG estimated that 861 employees remained at FSA as of March 11, 2025.
Of the 72 FSA suboffices impacted by the RIF, OIG found 55 suboffices have 50% or fewer of their employees remaining, 23 suboffices have some remaining employees, and 32 suboffices have no employees remaining.
OIG reviewed the functions of the FSA suboffices directly impacted by the RIF. What OIG found is that suboffices that oversee guaranty agencies, lending institutions, and servicers, and suboffices administering a program of eligibility, certification, financial analysis, and oversight of schools participating in FSA programs, had no remaining employees. OIG noted that these functions are all statutory responsibilities.
OIG also listed other non-statutory functions of 32 FSA suboffices with no remaining employees. Some of those functions included designing and executing FSA’s enterprise risk management system; managing FSA’s human resources operational functions and program; managing processes for Cohort Default Rates, ScoreCards, and Gainful Employment rates, and more.
There were also 23 FSA suboffices that had 50% or fewer employees remaining. Some of the functions of these offices include managing FSA’s customer website, the myStudentAid mobile application, and the Marketing and Communications platform; providing management services and support related to the performance of the Title IV portfolio and administering oversight of institutions participating in the department’s federal student aid programs; providing primary IT services for all FSA systems; and more.
OIG also listed the functions of the 64 FSA suboffices not impacted by ED’s RIF. Some of those responsibilities include; managing the Direct Loan program and the Teach Grant Origination and Disbursement processes maintained on the Common Origination Disbursement (COD) system and the COD website, including functionality available to FSA, schools, and servicers; implementing the Secretary’s authority to resolve appeals of final audit and final program review determinations; and more.
Lastly, OIG detailed changes in FSA contracts, finding that between January and March 2025, four FSA contracts were terminated and another four were descoped. The services provided by these contracts included Diversity, Equity, Inclusion, and Accessibility training; contract and procurement reviews; internal control assessments; and maintenance of FSA’s Digital and Customer Care application. Additionally, during January and March 2025, ED awarded nine new FSA contracts related to loan servicing, default management, and software licenses.
Publication Date: 7/24/2026
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