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AFGE Local 252 Files Grievance Against U.S. Department of Education for Dismantling the Office of Federal Student Aid (FSA)

FOR IMMEDIATE RELEASE
July 31, 2025

MEDIA CONTACT
press@defendstudents.org

AFGE Local 252 Files Grievance Against U.S. Department of Education for Dismantling the Office of Federal Student Aid (FSA)

Washington, D.C. — The American Federation of Government Employees (AFGE) Local 252 filed a grievance today against the U.S. Department of Education (ED) challenging the reduction-in-force (RIF) of the Federal Student Aid (FSA) workforce, which will take effect on August 1, 2025. AFGE Local 252 is being represented by Student Defense.

The grievance alleges that the RIF violates the FSA’s statutorily-guaranteed independence, and therefore the collective bargaining agreement between AFGE Local 252 and ED. This follows a national grievance filed July 23 by AFGE Local 252 against ED for failing to give employees a 60-day notice before an August 1st separation, violating their collective bargaining agreement.

For decades, FSA has statutorily operated as a “Performance-Based Organization” within ED. Despite being housed within the Department, Congress specifically granted FSA “independence” from the Department, including with respect to control of its budget allocations, expenditures, and personnel decisions. But according to the grievance submitted today, “FSA had no decision-making authority about the initiation of the RIF” and FSA was instructed by the Department (including from officials affiliated with the ‘Department of Government Efficiency’) to achieve a reduction in force of approximately 700 individuals.

On March 11, 2025, the Department first announced its plans to carry out a massive RIF. That day, approximately 970 ED employees—including the approximately 325 FSA employees represented by AFGE Local 252—received an email from the Department announcing the RIF, which the Department repeatedly declared was being conducted pursuant to the Administration’s “directive.”

“Congress designed Federal Student Aid to be free from political overreach, and the Secretary of Education does not have the authority to instruct FSA leadership to carry out a RIF,” said Student Defense Chief Counsel Dan Zibel. “Not only does this RIF harm countless employees, but it will have a catastrophic impact on students looking for a pathway to higher education, as well for those burdened by student debt.”

"Our members in the Office of Federal Student Aid are essential civil servants responsible for administering financial aid loans for students pursuing higher education degrees, disbursing funds, and overseeing compliance from student loan providers,” said Sheria Smith, President of AFGE Local 252. Students across the country rely on our colleagues to ensure they can access and manage financial aid and are not taken advantage of by bad actors. Already in the wake of this RIF and gutting of the department, we have seen the FAFSA website fail to function, sending students attempting to apply for financial aid into panic."

The grievance seeks to reinstate affected employees of AFGE Local 252, award back-pay, and require ED to comply with the collective bargaining agreement, all laws, and regulations. 

Read the full grievance on the Student Defense website.

Background 

The FSA is the largest provider of financial aid for college in the United States. It plays an integral role in the federal government’s financial aid system. In FY2024, the FSA provided approximately $120.8 billion in federal grants, loans, and work-study funds to more than 9.9 million students at 5,378 colleges and career schools. During that same year, FSA oversaw a loan portfolio of $1.6 trillion, consisting of 217.2 million student loans to an estimated 45 million borrowers (representing almost 17% of Americans aged 18 and over). Additionally, FSA:

  • Determines institutional and programmatic eligibility for federal aid 

  • Enforces compliance with financial aid regulations 

  • Processes the Free Application for Federal Student Aid (FAFSA)

  • Disburses Pell Grants 

  • Manages federal student loan repayment

  • Ensures that borrowers can access Congressionally authorized loan forgiveness programs.