Education Department struggles to fulfill its duties without a significant bump in funding
Lilah Burke
April 20, 2023
The U.S. Department of Education’s Office of Federal Student Aid has always had big responsibilities relative to its size. Its primary job is overseeing the federal government’s student loan portfolio, a feat it accomplishes with less than one-third of the Education Department’s staff. In fiscal years 2022 and 2023, it cost the government $2 billion per year to run the office.
But even starting with that big job, the office’s responsibilities are multiplying, and experts say it doesn’t have the funding it needs to make things run smoothly.
This year, FSA is expected to steward borrowers back into repayment after a three-year pause, implement new income-driven repayment plans, and bring millions of defaulted borrowers back into good standing, among a myriad of other initiatives. That takes money.
“FSA oversees and runs programs that touch every aspect of students’ and borrowers’ experience,” said Sarah Sattelmeyer, who manages projects related to student loans and higher education at New America. “FSA has a lot on its plate and not enough money to do everything that they want to do and that we want them to do.”
Cracks may well already be forming in the office’s ability to accomplish its directives. The office has been charged this year with launching an updated and streamlined version of the FAFSA — the Free Application for Federal Student Aid. Though that launch was meant to happen this upcoming October, the department has said it won’t be able to make that deadline. The new application will be launched sometime in December.
This year, FSA is expected to steward borrowers back into repayment after a three-year pause, implement new income-driven repayment plans, and bring millions of defaulted borrowers back into good standing, among a myriad of other initiatives. That takes money.
“FSA oversees and runs programs that touch every aspect of students’ and borrowers’ experience,” said Sarah Sattelmeyer, who manages projects related to student loans and higher education at New America. “FSA has a lot on its plate and not enough money to do everything that they want to do and that we want them to do.”
Cracks may well already be forming in the office’s ability to accomplish its directives. The office has been charged this year with launching an updated and streamlined version of the FAFSA — the Free Application for Federal Student Aid. Though that launch was meant to happen this upcoming October, the department has said it won’t be able to make that deadline. The new application will be launched sometime in December.
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