NASFAA Survey Shows U.S. Department of Education Turbulence Continues to Disrupt Financial Aid Services
FOR IMMEDIATE RELEASE
Contact: Allie Arcese
Sr. Director, Strategic Communications
[email protected]
WASHINGTON, D.C., AUGUST 20, 2025 — Following months of turmoil and uncertainty, financial aid administrators across the country report continued disruptions to financial aid operations in the wake of deep staff reductions at the U.S. Department of Education (ED) and broader efforts to dismantle the federal agency, according to the results of a survey released today by the National Association of Student Financial Aid Administrators (NASFAA).
The survey, conducted in July 2025, draws on the responses of financial aid practitioners at more than 500 higher education institutions nationwide. The results show a continued pattern of breakdowns in communication that surfaced in a previous NASFAA member survey in May, and highlight deepening negative impacts to students directly. Compared to NASFAA’s May survey, the July data suggest that the downstream effects on students are intensifying. Reports of student confusion or concern rose from 32% in May to 51% in July. This is in addition to typical inquiries or concerns related to ED/FSA services.
Key findings include:
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Persistent and growing delays: 72% of institutions reported noticeable declines in FSA responsiveness and processing timelines since the significant reduction in staffing that occurred in spring 2025, up from 59% in May. While some administrative processing delays existed prior to the staffing changes, the loss of staffing resources seems to have exacerbated those delays.
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System and service failures: More than half (53%) cited problems with federal call centers, while 47% experienced disruptions with the National Student Loan Data System (NSLDS).
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Student-facing impacts: 51% of institutions said students are reporting receiving confusing or delayed information from ED/FSA; 60% reported increased student inquiries about federal aid access and timing since May. This is in addition to typical inquiries or concerns related to ED/FSA services. While inquiry volume often increases during the summer, the timing may also reflect growing student awareness of federal changes, including recent legislation and reports of ED-related disruptions. Institutions did not always indicate whether inquiries were directly tied to staffing reductions, but several noted student confusion about FAFSA processing and federal aid systems.
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Loss of federal support: 43% of institutions have seen their FSA regional office close, with 39% reporting gaps in the critical support those offices once provided.
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Mounting administrative burdens: Nearly one-quarter of institutions have deferred tasks or redistributed staff duties to manage delays and workarounds caused by reduced federal capacity.
“Financial aid administrators are resourceful and committed, but there’s only so much they can do to shield students from these disruptions. The results of this survey show the cracks in service and communications are widening, and office operations in support of students and families are strained,” said NASFAA President & CEO Melanie Storey. “If federal service channels don’t stabilize soon, the nation’s student aid system could become less accessible, less predictable, and less trusted — at the very moment students and families need it most.”
NASFAA policy experts are available to speak to members of the media about the results of the survey, as well as the impact of federal staffing reductions. To set up an interview, please email [email protected].
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About NASFAA
The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents more than 29,000 financial aid professionals at approximately 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every 10 undergraduates in the U.S. Based in Washington, D.C., NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators.
Publication Date: 8/20/2025