Looking Forward

Many of the ways ED and servicers need to improve communication will not be possible without additional funding. Servicers need funding to hire more staff, so their call centers can provide prompt responses to incoming calls, personalized advice, assistance with applications, and referrals to other benefit programs. ED, specifically FSA, needs increased funding so it can user-test and revamp more of its products, from its forms to its website.

Community-based partners also need more resources to ensure effective, direct support for struggling borrowers. For example, without dedicated funding from ED, community-based organizations on the “SAVE on Student Debt” campaign need to rely on fundraising or private philanthropy for outreach activities. As a result, the organizations say they have no choice but to incorporate SAVE promotion into their current work, rather than expanding outreach activities for SAVE specifically.

Unfortunately, FSA does not have the resources needed for large-scale outreach improvements, since the agency has not received the amount of money it requested from Congress for several years. Funding for student aid administration activities has remained relatively flat since 2022, staying at around $2 billion. And while Congress increased funding for student aid administration by $25 million for the 2024 fiscal year, that amount was nowhere near the $600 million increase that President Biden requested.¹ The inadequate amount of funding creates challenges for FSA, as the agency is trying to implement significant reforms to the student aid system, including the simplification of the FAFSA, the new servicing contracts, and updated loan programs in the midst of the return to repayment.² If Congress is invested in ensuring that borrowers experience smooth servicing and effective outreach, it must prioritize investments in FSA.