Federal student loan borrowers experiencing difficulties with their loans could find they have no recourse as President Donald Trump‘s cuts to staff at the Department of Education are carried out, employees at the agency said.

Staffers at the Education Department tasked with fielding complaints from federal student loan holders and resolving their issues were let go in the recent job cuts, one employee told CNBC. At least eight of the fired staffers were working on a total of nearly 800 student loan borrower complaint cases, an employee said.

The remaining staff will likely have to take over these accounts. But, the employee said, “I have no idea when they’ll get reassigned.”

As a result, those borrowers “just have to continue to wait, and maybe they go into delinquency,” the staffer said.

Hundreds of thousands of people submit complaints to the Office of the Ombudsman at Federal Student Aid each year, according to a rough calculation by higher education expert Mark Kantrowitz.

Trump is expected to sign an executive order calling on Education Secretary Linda McMahon to abolish the agency, a move that experts say would worsen the situation for borrowers. The Wall Street Journal first reported on that expected order.

As a department authorized by Congress, the department cannot be eliminated without congressional approval. But in the meantime, the Trump administration can slowly starve it by cutting resources.

There are roughly 42 million Americans who owe federal student loans, and the outstanding debt exceeds $1.6 trillion. Currently, around 9.2 million people — 43% of the roughly 22 million borrowers with payments due — are behind on their payments, according to a recent VantageScore report.

Federal student loan borrowers need assistance now more than ever, the Education Department staffers said. Collection activity is resuming for the first time in roughly five years after the expiration of pandemic-era relief, and a new repayment plan, called SAVE, that millions had enrolled in is now blocked by the courts.

“People will start having their wages or benefits garnished,” the staffer said. “If this happens erroneously, it would be extremely difficult to resolve that on your own.”

“Borrowers would be stuck having their money seized without a way to stop it,” they said.

More from Personal Finance:
Congress’ proposed cuts may jeopardize Medicaid
Canada, Mexico tariffs create ‘ripple effects’ on consumer prices
Social Security plans to cut about 7,000 workers

Borrowers who reach out the Education Department with questions or complaints are now less likely to get assistance, the staffers told CNBC

Sources for this story requested anonymity because they feared retribution if they were named..

A White House spokesperson did not respond to questions from CNBC about the slowdown in student loan borrower assistance at the Education Department.

The in-house team dedicated to helping borrowers with Public Service Loan Forgiveness program no longer exists, a staffer said. As a result, remaining employees are unsure of where to direct borrowers who have issues with this program, the employee said. (PSLF is a popular way for public servants and those who work at nonprofits to get their debt canceled after 10 years of payments.)

“We lost that expertise and the ability to answer complaints in a timely manner,” the employee said.

Staffers say borrowers are already feeling the effect.

One employee told CNBC they are currently helping a woman get her student debt discharged because of her disability, and that “every time we talk she’s terrified I won’t be there the next time.”

The employees said their work in complaint resolution has had huge impacts on people’s financial lives, and those efforts are now at risk.

They said they were able to get loans discharged for victims of identity theft, teachers and countless disabled borrowers.

For the first time since the pandemic, becoming past-due on your student loan payments will hurt your credit again.

The more than 9 million borrowers who are late on their payments may see their credit scores tank by as much as 129 points as the U.S. Department of Education ramps up collection activity again, a new report by VantageScore finds. The credit score company analyzed U.S. Department of Education data.

Meanwhile, those who are paying their student loan bills on time will likely benefit from a rise in their credit scores by much as eight points, according to VantageScore.

Credit scores typically range from 300 to 850, with around 670 and higher considered good.

More from Personal Finance:
Social Security plans to cut 7,000 workers
Trump, DOGE job cuts may be biggest in history
Funding freeze stymies Biden-era consumer energy rebates

It’s been a long time since federal student loan borrowers have needed to worry about the downsides of missed payments, which can also include the garnishment of wages and retirement benefits. That’s because collection activity was suspended during the the pandemic and for a while after. The relief period officially expired on Sept. 30, 2024.

“For the first time in five years, federal student loan delinquencies will start to reappear on credit files,” said Rikard Bandebo, chief economist at VantageScore, in a statement.

Here’s what student loan borrowers should know about their credit scores.

“Borrowers with past-due student loans and lower credit scores face higher borrowing costs across the board — from mortgages, car loans and credit cards,” said Curtis, a member of CNBC’s Advisor Council.

Federal student loan borrowers who’ve defaulted on their loans may also see their wages garnished starting in October of this year, according to a January memo from the U.S. Department of Education.

The borrowers can apply for an income-driven repayment plan, which will cap their monthly bill at a share of their discretionary income. Many borrowers end up with a zero monthly payment. As of now, the applications for IDR plans are unavailable while the Education Department makes sure its plans comply with a new court order. But you should be able to access one in the coming months.

Borrowers can also apply for a number of deferments or forbearances, which can pause your payments for a year or more.

Additionally if you’re already in default on your loans, you should consider rehabilitating or consolidating your debt, experts said.

Rehabilitating involves making “nine voluntary, reasonable and affordable monthly payments,” according to the Education Department. Those nine payments can be made over “a period of 10 consecutive months,” its web site notes.

Consolidation, meanwhile, may be available to those who “make three consecutive, voluntary, on-time, full monthly payments.” At that point, they can essentially repackage their debt into a new loan. (The online loan consolidation application is also temporary unavailable.)

If you don’t know who your loan servicer is, you can find out at Studentaid.gov.

Experts also recommend that you check your credit reports regularly for free at AnnualCreditReport.com to make sure all three credit rating companies — Experian, Equifax and TransUnion — are showing your correct student loan balance and payment status.

When it comes to the rise of multimillionaires, the United States is leading the charge, a new report found.

The number of high-net worth individuals — or those with assets worth more than $10 million — rose 4.4% worldwide in 2024, to 2,341,378, but jumped 5.2% in North America, according to the annual Wealth Report by global real estate consultancy Knight Frank.

The U.S. is now home to almost 40% of the world’s super rich, the report estimates — nearly double the share that resides in China, the region with the next highest contingent of wealthy individuals.

More from Personal Finance:
Americans are suffering from ‘sticker shock’
The U.S. is appointing an ‘affordability czar’ 
Canada, Mexico tariffs create ‘ripple effects’ on consumer prices

“While the global economy slowed through 2024, the resilience of the U.S. helped prop up investor confidence,” Liam Bailey, global head of research at Knight Frank, said in a statement. “The trends powering wealth creation, including growth in financial markets led by equity markets and the bitcoin run, continued through 2024.”

Over the year, positive market conditions helped boost investors’ bottom line. The S&P 500 stock index gained 23% in 2024. The tech-heavy Nasdaq grew about 29% and the Dow Jones Industrial Average rose more than 12%.

“And despite geopolitical tensions, resilient global trade further contributed to growth,” Bailey said.

Meanwhile, the total number of billionaires jumped nearly 8% last year, according to a separate report by Oxfam from January.

“We’ve reached a new era now, we are in the era of the billionaire,” Jenny Ricks, general secretary of the human rights group Fight Inequality Alliance, recently told CNBC. 

Roughly 204 new billionaires were minted in just 12 months, the Oxfam report found.

“Not only has the rate of billionaire wealth accumulation accelerated — by three times — but so too has their power,” Amitabh Behar, Oxfam International’s executive director, said in a statement after the report’s release.

The latest numbers also underscore a deepening divide between the world’s rich and poor. 

Despite the fact that America ranks first as the richest nation, 36.8 million Americans live in poverty, accounting for 11.1% of the total population, according to the latest report from the U.S. Census Bureau. 

Many middle-class Americans are also showing signs of strain amid the escalating trade war and increased inflationary fears.

Subscribe to CNBC on YouTube.