Funding woes at the Education Dept. threaten federal student aid agenda

The student aid office is delaying or curtailing plans to help millions of Americans ease back into the routine of paying their student loans after a three-year suspension brought on by the pandemic. The funding crisis is forcing the Office of Federal Student Aid to make sacrifices, including cuts to customer service hours and outreach, that experts worry could place already vulnerable borrowers at higher risk of falling behind on their payments.

The Education Department had sought to increase FSA’s $2 billion budget by a third for the current fiscal year, but in the end, the funding was kept flat. And with House Republicans seeking to roll back education spending to 2022 levels, the fight for additional dollars in the next budget promises to again be fierce.

“Restarting repayment requires significant resources to avoid unnecessary harm to borrowers, such as cuts to servicing,” an agency spokesperson said in a statement to The Washington Post. “We continue to urge Congress to fully fund President Biden’s FY24 budget request, which would provide critical resources to FSA.”

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