If you have federal student loans, you trust the company managing your account to keep accurate records. You trust that your monthly bill reflects what you actually owe. You trust that when you call for help, the person on the other end gives you correct information.
A new report from the U.S. Government Accountability Office suggests that trust may no longer be justified. The nonpartisan watchdog found that the Education Department quietly stopped verifying whether your loan servicer’s records are right.
It also stopped monitoring the quality of phone calls between servicers and borrowers. The agency’s reason was straightforward: It did not have enough staff.
The timing could not be worse. Major changes to federal student loan repayment arrive this summer. Millions of borrowers will need reliable guidance from these same servicers. Right now, no federal check exists to make sure they get it.
The Education Department stopped checking your loan servicer’s accuracy
The GAO report, released March 11, 2026, documents a breakdown in how the federal government oversees student loan servicers.
These are private companies that process your payments, maintain your account records, and advise you on repayment options.
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In February 2025, the Office of Federal Student Aid stopped conducting quarterly assessments of servicer accuracy, CNBC reports. FSA also stopped reviewing recorded calls between servicers and borrowers. These assessments were required under contracts FSA signed with its five loan servicers in April 2024.
The agency told GAO investigators it halted the reviews because it lacked staff capacity. The numbers support that claim. FSA began 2025 with 1,433 employees. By December, it had 777. That is a 46% reduction in a single year.
What inaccurate loan servicer records could mean for your finances
This is not an abstract bureaucratic issue. If your loan servicer has the wrong information in your file, the consequences show up in your bank account.
According to the GAO report (GAO-26-108534), inaccurate servicer records could lead to:
- Being placed in the wrong repayment status
- Getting billed for incorrect amounts each month
- Having a refund delayed or never processed
- Receiving wrong information about repayment plans or forgiveness eligibility
The servicer’s track record was already poor before oversight ended
The GAO reviewed servicer performance at the end of 2024. Four of the five federal loan servicers failed to meet the Education Department’s own accuracy standards. Two of those servicers received the maximum financial penalty allowed under their contracts.
Loan servicers have long faced criticism for misleading borrowers or giving them bad advice. Rep. Bobby Scott of Virginia told NPR that borrowers risk overpaying or landing in the wrong program. He called the department’s failure to oversee servicers a dereliction of duty.
The federal student loan system is about to get much more complicated
The oversight gap is alarming on its own. It becomes far more dangerous, given what is coming next for federal student loans. Several major policy changes take effect in July 2026 under the One Big Beautiful Bill Act.
The SAVE plan is officially dead
The Biden-era Saving on a Valuable Education repayment plan offered the lowest monthly payments of any federal program.
On March 10, 2026, the U.S. Court of Appeals for the 8th Circuit ordered SAVE’s permanent termination. More than 7 million borrowers are still enrolled. Their loans have been accruing interest since August 2025.
New repayment plans are replacing familiar ones
Starting in July, two brand-new repayment plans will launch. Several existing options, including Income-Contingent Repayment and Pay As You Earn, will be phased out by 2028. New borrowers will have far fewer choices than those who enrolled even a year ago.
You will rely on your servicer to explain these new plans. The GAO warned that millions of people will need accurate information when they call. The Education Department has no way to verify that they are getting it.
About 12 million student loan borrowers are in or near default
An estimated 12 million federal student loan borrowers are either in default or approaching it. Default carries serious consequences for your finances. The government can garnish your wages, seize your tax refund, and damage your credit score.
Borrowers in this situation need accurate guidance on rehabilitation and repayment options. Without federal oversight of service quality, there is no guarantee they will receive it.
New student loan borrowers will have far fewer choices than those who enrolled even a year ago.
The Education Department disagrees with the GAO’s recommendation
GAO made one formal recommendation: resume the assessments of servicer accuracy and call quality.
The Education Department declined. Richard Lucas, FSA’s acting chief operating officer, argued the agency uses other methods to evaluate servicers.
Those methods include borrower satisfaction surveys, weekly executive check-in meetings, and daily performance reports from the servicers themselves.
GAO says the alternative methods are not sufficient
GAO concluded that these alternatives do not effectively replace direct accuracy assessments.
The department’s own independent financial auditor reinforced this point. In January 2026, the auditor found the Education Department still had a material weakness in the reliability of its student loan data.
Related: Federal student loan changes could raise payments for millions
The Education Department pays servicers more than $1 billion per year to manage borrower accounts, according to higher education expert Mark Kantrowitz.
GAO’s Melissa Emrey-Arras said that without accountability, the government risks overpaying for poor performance.
How to protect yourself if your loan servicer has wrong records
You cannot control whether the Education Department resumes oversight. But you can take steps now to check your own records and reduce your exposure to servicer errors.
Review your account on StudentAid.gov
Log in to StudentAid.gov and verify your loan balances, repayment status, and servicer assignment. Compare what the federal site shows against your servicer’s records. Flag any discrepancy immediately.
Keep your own payment records
Download or take screenshots of your payment confirmations each month. If your servicer disputes a payment or applies it to the wrong loan, your own records become your evidence. Store them in a folder you can access quickly.
Do not rely solely on your servicer for plan advice
New repayment plans launch in July 2026. Use the Federal Student Aid Loan Simulator to estimate your payments under each plan before calling your servicer. This gives you a baseline to spot bad advice.
File complaints when something goes wrong
If your servicer gives you wrong information or mishandles your account, file a complaint with the Consumer Financial Protection Bureau and the Federal Student Aid Feedback Center.
The more borrowers report problems, the harder it becomes for the department to justify skipping oversight.
Watch for the July 2026 SAVE transition deadline
If you are enrolled in SAVE, you must switch repayment plans. If you have Parent PLUS loans, consolidate them into a Direct Consolidation Loan before July 1, 2026.
After that date, Parent PLUS borrowers lose access to income-driven repayment. Consolidation takes four to six weeks. Do not wait until June.
The numbers behind the student loan oversight gap
The federal student loan portfolio is massive. Roughly 43 million Americans carry about $1.6 trillion in federal student loan debt, according to the Department of Education. Student debt is the second-largest category of consumer debt in the country, behind only mortgages.
Five private companies service this entire portfolio. They process payments, field borrower questions, and maintain the records that determine how much you owe. When the federal government stops verifying those records, 43 million borrowers are left to catch errors on their own.
Sen. Bernie Sanders of Vermont, who requested the GAO investigation, said the administration has made it harder for borrowers to understand their obligations. Scott Buchanan, executive director of the Student Loan Servicing Alliance, countered that servicers monitor themselves because accurate records serve their financial interest.
The GAO report undercuts that argument. Four of five servicers failed accuracy standards even while federal oversight was still active.
Self-policing alone was not enough then. Without any external check at all, the risks to your account only grow.
Related: SAVE Plan ends with bad news for student loan borrowers