The White House is seen in Washington, D.C.on September 09, 2025. Yasin Ozturk | Anadolu | Getty ImagesThe U.S.
Department of Education may soon begin sharing information with students and families on "the benefits and risks" of federal student loans, the Trump administration recently announced.The department's Office of the Ombudsman will take "a active apach to imve financial literacy," according to a Sept.
5 press release, so that students "are better equipped to make careful borrowing decisions."The agency said its effort comes as outstanding federal student debt nears $1.7 trillion, and "loan defaults and delinquencies remain at record highs."Elaine Rubin, director of corporate communications at Edvisors, said that "addressing financial literacy and college costs in the cess of financial aid is never a bad thing."More from Personal Finance:How to get a better mortgage rate as the 30-year fixed nears 1-year lowHere's how to handle your student loans after losing a jobGold is on a record run — here's how to investHistorically, the Ombudsman's office dealt primarily with complaints from student loan borrowers.
However, it's un what the fate of that work will be after the Education Department's sweeping layoffs in March.Experts say the staff cuts also raise questions how the Trump administration will be able to launch this new borrowing education effort."The real question is whether there's anybody left in the Ombudsman's office to do any of this," said higher education expert Mark Kantrowitz.Effort amid high delinquency ratesThe U.S.
Department of Education headquarters is seen on March 06, 2025 in Washington, DC.
Chip Somodevilla | Getty Images News | Getty ImagesThe Trump administration said more financial guidance is needed for borrowers amid the student loan portfolio's "sobering statistics."More than 42 million Americans carry federal student loan debt.
As of June, over 6 million borrowers were delinquent, and more than 5 million were in default, the Education Department said."By viding er guidance and support at the front end of the college journey, we believe students will make more informed decisions that lead to lower debt burdens, stronger repayment outcomes, and greater satisfaction with their educational investment," said Undersecretary of Education Nicholas Kent, in a statement.More pressing blems, consumer advocates sayConsumer advocates said the Education Department's efforts could pull resources needed to address more pressing blems, including fixes for millions of borrowers who are unable to access affordable repayment options."By shifting focus to borrower education, it diverts attention from the urgent need to resolve consumer complaints and systemic servicing failures," said Carolina Rodriguez, director of the Education Debt Consumer Assistance gram in New York.As of the end of July, the Education Department had a backlog of more than 1.3 million applications from borrowers trying to get into an income-driven repayment, or IDR, plan, recent court documents show.The pileup of applications is due, in part, to the end of President Joe Biden's , or Saving on a Valuable Education, plan.
That gram was meant to significantly lower millions of borrowers' bills but was met with Republican-led legal challenges and eventually repealed this summer in President Donald Trump's "big beautiful bill."Many student loan borrowers now can't afford the repayment plan options available to them, consumer advocates said.
The monthly payments on were much lower than those offered under other plans, and recent legislation further narrows borrowers repayment choices."There is no amount of financial literacy that will solve the more than 1.3 million IDR application backlog or give answers to borrowers who have to wait on hold for several hours to find out the of their loans," said Persis Yu, deputy executive director and managing counsel at the Student Borrower tection Center.Don’t miss these insights from CNBC Nobel winner Joseph Stiglitz has a warning for bond investorsAs traditional 60/40 portfolios get riskier, BlackRock says investors should rethink their allocationsGoldman adds Walmart to September 'conviction list.' Here's who else made the cutNvidia retail buyers are getting exhausted