US Student Aid Office Expects New Cuts After Losing 10% of Staff

A top official at the US Department of Education’s Federal Student Aid office expects additional job cuts after it lost more than 10% of its staff in recent weeks, according to a recording of an all-hands meeting that was shared with Bloomberg News.

The staff reductions at the FSA office, which distributes financial aid to millions of students across the US, were part of the voluntary deferred resignation program that was offered to federal workers, Phillip Juengst, an executive at the FSA, told employees on a call last week. Probationary employees were also cut, he said.

“The 10% we’re losing now, we’re going to be losing more,” Juengst said in the meeting, which was the first all-hands gathering since the new administration took office, according to a person familiar with the matter. “We’re still waiting for the president and the secretary’s vision for what the future of the Department of Education should be.”

Juengst and a spokesperson for the Education Department didn’t immediately respond to requests for comment.

The loss of staff at the FSA office, which had more than 1,400 employees, comes as President Donald Trump and billionaire Elon Musk work to reduce the size of the federal workforce.

Trump has said repeatedly that he wants to shut down the Education Department and that he hopes Linda McMahon, his pick for secretary of education, will “put herself out of a job.”

Musk’s Department of Government Efficiency has six staffers embedded at the Education Department, where they’ve accessed internal information and directed cuts to hundreds of millions of dollars worth of contracts. A Maryland federal district court said Monday that DOGE should be blocked from accessing sensitive personal information from the Education Department.

Juengst told employees on the call that the FSA office is “going to do less with less” as it grapples with the staff reductions.

“The expectation is that we are really going to reduce some of what the federal government is focused on,” he said. “So we are looking at what is our core work that is required by statute and what is not required by statute.”

Musk has threatened in social media posts that federal workers could be suspended or fired if they don’t return to the office, or don’t respond to a weekend email from the Office of Personnel Management requesting information on what they did last week.

Juengst told staff that they’re working to prepare FSA offices for the return-to-office push, but that as it stands several locations across the country don’t have space for all their workers.

“I’ve got 700 people and only 400 seats,” he said of one of FSA’s DC offices, adding that Boston, Chicago, New York and San Francisco offices also don’t have enough room for all staff.

--With assistance from Dana Hull.

To contact the reporters on this story:
Sophie Alexander in New York at salexander82@bloomberg.net;
Jason Leopold in Los Angeles at jleopold15@bloomberg.net

To contact the editors responsible for this story:
Brian Chappatta at bchappatta1@bloomberg.net

Craig Giammona

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