Student Defense Announces Investigation Into the Trump Administration’s Use of AI To Administer Federal Student Aid Programs
FOR IMMEDIATE RELEASE
March 5, 2026
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Student Defense Announces Investigation Into the Trump Administration’s Use of AI To Administer Federal Student Aid Programs
Washington, D.C. – Student Defense today announced a comprehensive investigation into the Trump administration’s use of Artificial Intelligence (AI) across federal programs serving students and student loan borrowers. The investigation raises urgent questions about whether federal processes such as student assistance, oversight, rulemaking, and benefits administration are being secretly outsourced to AI without safeguards or oversight.
Student Defense is using Freedom of Information Act (FOIA) litigation, working with Congressional oversight staff, and launching a new tipline for federal employees and contractors to reveal how AI tools are being used across departments.
In April 2025, the White House budget office sent a memo urging all agencies to “accelerate the federal use of AI,” and to “harness solutions that bring the best value to taxpayers, increase quality of public services and enhance government efficiency.” This directive signaled a government-wide push to integrate AI into core governmental functions, despite concerns about tech companies’ lack of compliance with federal privacy laws. Recent reports indicate federal agencies are following the instructions and rapidly expanding AI use, by “automating rote tasks” and launching “hundreds of artificial intelligence projects in the past year.”
More than 42 million Americans have federal student loan debt, with the portfolio exceeding $1.6 trillion. The government is responsible for helping borrowers navigate those loans. It is also responsible for protecting student data. Without proper guardrails, there are enormous risks to AI tools accessing the federal government’s massive databases full of student borrowers’ sensitive information, including financial records and detailed repayment and borrowing histories.
This investigation aims to determine whether this sensitive data is being shared with external AI companies, and if the federal government has taken the necessary steps to ensure staff using AI to outsource responsibilities are properly trained. It also aims to ensure students are getting legitimate and accurate advice and support while managing their loans. So far, Student Defense has filed 12 FOIA requests to get answers from the Trump administration about the following topics:
The use of AI in the Federal Student Aid Ombudsman’s office to handle student inquiries and complaints. The Ombudsman’s Office is responsible for resolving complaints about Title IV financial aid programs, which have risen from 48,000 in FY2021 to nearly 290,000 in FY2024. Complaints “span a host of topics, from issues with loans, issues with schools, to issues for applying for aid, among others.”
The use of AI in rulemaking processes, including Public Service Loan Forgiveness, Title IV, and in other rulemaking efforts.
Contracts and agreements with AI companies, specifically between the Office of Federal Student Aid (FSA) and any external vendor for AI systems.
Use of AI that affects veterans’ education benefits, because the Washington Post reports the VA “listed more high-impact uses of AI than any other agency, disclosing 174 such tools either in development or operation to revamp how it provides health care and benefits.”
“The American people deserve to know what’s being outsourced to AI tools, whether they can rely on the information they’re getting from the government, and whether their data is being protected from external companies,” said Aaron Ament, President of Student Defense.
Anyone with information about how the federal government is using AI in any of these instances should submit it through Student Defense’s contact form. Select “Government Use of AI” as the topic.
More information about this investigation can be found here.
