Millions of Americans are getting ready to repay their federal student loans next month, and many have questions – from where to get started online to what repayment plan is right for them. Early signs suggest that the companies the government pays to answer those questions are struggling, as borrowers flood their phone lines.

The Consumer Financial Protection Bureau (CFPB) and its director, Rohit Chopra, are watching loan servicers closely, collecting data on how much time borrowers spend on hold — and how many simply give up before they even get through.

"What you're hearing is what we're seeing as well," Chopra told me in a recent interview.

And what I'm hearing, I told Chopra, is frustration from borrowers like Steve Kalke, in Houston, who wants to know, "Why does it take so long for my loan servicer to respond or to approve my documents or to really get any answers back to me in a timely manner?"

Chopra says, not only are borrowers having to wait for answers, "we're seeing that many borrowers are struggling to even get through to their servicers."

The problems are plenty.

For one, the system is more complex than ever, with the Education Department and servicers rolling out a new repayment plan at the same time the department is doing an unprecedented review of borrowers' records and adjusting millions of accounts.

Making matters worse, several of the largest servicers ended their contracts during the pandemic, forcing a tidal wave of borrowers and their records onto other servicers.

Finally, there's the sheer, overwhelming math of it all.

In normal times, the handful of companies that service federal student loans have to help a few million borrowers a year move into repayment. But, right now, they need to help 39 to 40 million — and do it with less money than usual. That's because Congress essentially froze the Education Department's funding for 2023.

Instead of ramping up, the Department is telling its servicers: Scale back.

"The Department indicated that, because of budget cuts, there's going to be a need to reduce weekend and evening call center hours," says Scott Buchanan, who heads the Student Loan Servicing Alliance, a trade group for loan servicers.

Buchanan says these cuts are putting them in an impossible position. Just imagine, he says, in your job, whatever it is you do, being told, your workload is about to increase exponentially, "then your boss comes in and says, 'Oh, we fired four people because we don't have the money to pay for them.' And then says, 'but keep up the same level of service.' That's going to be a problem for any business."

And right now, it's a problem for borrowers too, which is why Rohit Chopra, at the watchdog CFPB, has this warning for servicers:

"Budget cuts are never a rationale for breaking the law."

By that, he means giving borrowers incomplete or inaccurate information, even if it's by accident. Chopra says, too often right now, the call center workers who do pick up the phone to answer borrower questions are brand new and don't understand the system.

"I think when it comes to telling borrowers the truth, or making sure they're adhering to all the consumer protection laws we have on the books at the federal and state level, you know, not getting paid enough is not going to be an excuse," Chopra says.

Loan servicers are doing the best they can right now, says Buchanan.

"You can beat us up if you want to, but it's not actually going to solve the issue. Everyone needs to agree: We want better service. We want people to have quicker access to agents on the phone. And the only thing that's really going to solve that is Congress investing more money."

Until that happens, Buchanan says, servicers will do the best they can, while Rohit Chopra warns, that may not be nearly good enough.

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