Washington gutted the office that manages your student loans. Next week, it has to reinvent them
On July 1, the biggest student loan overhaul in decades kicks in. The agency running it lost 40% of its staff and is blocking its own watchdog from seeing the damage.
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Next week, how Americans fund higher education will change forever. On July 1, sweeping changes to student loan borrowing will take effect, setting lifetime caps on previously unlimited loans and limiting the options for repayment. Recommended Video But, on March 11, 2025, Federal Student Aid (FSA), the office that manages student loans, was gutted by DOGE cuts, and problems have embroiled borrowers since. Student loan borrowers have reported issues with repaying their loans, including incorrectly receiving monthly payment bills as low as $50, when their actual payments were thousands of dollars. Other borrowers can’t access the Pay As You Earn repayment plan that should still be available to them, even as the Trump administration cut that option for new borrowers, CNBC reported.
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