Increased Oversight of Student Loans Expected as Democrats Retake Congress

Democrats are poised to have commanding majorities in Congress following the party’s sweeping election victories earlier this month.And once Democratic lawmakers take control of powerful House and Senate committees in January, they are likely to turn their oversight authority on the Education Department’s handling of federal student loans, as well as the department’s contractors.

Congress basically has two main jobs: passing legislation, and overseeing executive branch activities.Democrats will likely try to pass a good amount of legislation, but any bills they pass would require President Trump to sign on, and there’s a good chance that may not happen, at least for some of the more sweeping proposals.But Congress also has the authority to conduct oversight of executive branch agencies; lawmakers can open up investigations, subpoena records, compel officials to testify under oath, and hold public hearings.

While this may not sound like the most exciting set of tasks for incoming lawmakers, it is a critical constitutional responsibility.And these oversight efforts can potentially lay the groundwork for major reforms and future legislation by shining a light on everything that’s currently going wrong.

And when it comes to student loans, a lot is indeed going wrong right now.Borrowers are facing significant processing delays for programs like Public Service Loan Forgiveness (PSLF), the Total and Permanent Disability (TPD) discharge program, and Borrower Defense to Repayment.Millions of student loan borrowers are being kicked off of the SAVE plan and forced into more expensive repayment programs, leading to spiking payments.

And the Education Department’s complaint systems are bogged down and backlogged, making it difficult or impossible for borrowers to obtain assistance, or even to get simple answers or updates.

In this context, Congress’s oversight responsibilities are more important than ever.And within the next few months, student loans may become a major focus.Here’s what to expect.

Federal Oversight of Student Loans Has Been Dramatically Diminished

Critics and student loan borrower advocacy groups have argued for much of the last two years that the Trump administration has systematically curtailed oversight of federal student loans.The administration has gutted the Consumer Financial Protection Bureau (CFPB), an independent federal agency tasked with regulating the financial services sector, including student loan servicing.

And following a mass reduction in force, the Education Department’s staff has been reduced by upwards of 50%, with major cuts hitting the Office of Federal Student Aid (FSA), which oversees the federal student loan system, particularly hard.The FSA Feedback and Ombudsman units, which handle student loan borrower complaints and disputes, have been significantly diminished.And the department has also gutted a unit tasked with overseeing the department’s contracted student loan servicers.

“In February 2025, the Department of Education’s Office of Federal Student Aid (FSA) stopped assessing student loan servicers on accuracy and call quality due to lack of staff capacity, according to agency officials,” said the Government Accountability Office (GAO) in March, summarizing its report on the state of federal student loan servicing.“The decision to stop assessing these performance metrics occurred shortly after the new administration began issuing presidential directives and guidance on downsizing the federal workforce in January 2025.

Education reported that between January and December 2025, the number of staff at FSA dropped from 1,433 to 777, a reduction of 656 personnel.”

The GAO noted that the lack of oversight of student loan servicers is likely harming borrowers.

“As of December 2025, FSA was not using any replacement methods for overseeing accuracy and call quality and had not changed the performance standards,” the agency said.“By not assessing servicer accuracy and call quality, FSA lacks assurance that borrower records are correct and that servicers are giving borrowers quality information.Inaccurate records can result in borrowers being billed for incorrect amounts or placed in the wrong repayment status.”

Calls Grow for More Oversight of Student Loans

This past September, a group of state student loan ombudspersons wrote to the Education Department, outlining widespread student loan servicing problems borrowers are experiencing including processing delays, payment calculation errors, and poor recordkeeping.The group blamed the department’s staffing cuts and diminished oversight of loan servicers for the problems, and asked Congress to step in and exercise its oversight authority.

“The failures described in this letter are not isolated.

Taken together, they reveal persistent weaknesses in the systems and controls used to administer federal student loan repayment plans, maintain accurate accounts, track progress toward forgiveness, and identify and correct errors,” wrote the group in a letter to the Education Department and congressional leaders.“We respectfully request that the Committees exercise their oversight authority to investigate these operational breakdowns, evaluate proposed remediation strategies, and safeguard the integrity of the federal student loan portfolio.”

Separately, another group of nearly 90 organizations, including student loan borrower advocacy groups, called for lawmakers to initiate congressional hearings on student loans.

“We, the undersigned 89 organizations representing millions of students, borrowers, workers, veterans, people of color, people with disabilities, and consumers write to sound the alarm on the unprecedented levels of confusion, misinformation, servicing errors, and administrative failures that millions of student loan borrowers are being forced to navigate as implementation of the One Big Beautiful Bill Act continues,” wrote the organizations in the letter to congressional leaders in September.“We urgently call for your respective committees to engage in critical oversight and convene an emergency hearing in order to protect borrowers and hold the U.S.Department of Education and its student loan servicers accountable.”

Oversight of Student Loans Could Lead to Eventual Reform

Congressional hearings and investigations will not yield immediate, tangible results for student loan borrowers.

But they can nevertheless be extremely important in laying the foundation for real change.

Using their subpoena authority and the power of public hearings, lawmakers can haul Education Department officials into committee hearings for testimony under oath, and they can obtain critical records and documentation.This can shine a light on what might be going on behind the scenes when it comes to untangling problems with student loan programs such as PSLF and the wind-down of the SAVE plan.It can also put public officials on the spot.

Lawmakers could also turn their oversight and investigatory powers on student loan servicers, debt collection agencies, and other non-government entities in the student loan space that critics are also accusing of widespread mismanagement.Companies and organizations that are not complying with the law, or are engaging in actions that are harmful to student loan borrowers, may not want to risk a congressional investigation, and may start making positive changes and improvements to their practices voluntarily.

Ultimately, the results of congressional oversight over federal student loans may bring about more transparency, voluntary corrections of misconduct, and greater public awareness about what student loan borrowers are currently experiencing.

And that, ultimately, can become the basis for very real legislative reforms that could have a real impact for borrowers.