The U.S. Department of Education said it will begin shifting an undisclosed number of federal student-loan accounts away from MOHELA to other servicers before the end of the year. In a letter to Sen. Elizabeth Warren, Acting Assistant Secretary Sarah Ursprung wrote that the move is intended to “improve customer service” for borrowers after repeated criticism of MOHELA’s long call-wait times, billing errors and misleading statements. The servicing overhaul comes amid operational strain inside Federal Student Aid, where recent layoffs have coincided with a jump in complaints from borrowers and college administrators about payment processing and aid delivery. Trade-group surveys released this week show grievances against FSA climbing sharply as the agency restructures its workforce. Repayments on federal loans fully resumed earlier this year, and new data suggest many borrowers are struggling to keep up. The Consumer Financial Protection Bureau reports the overall delinquency rate has risen to 12.9%, the highest in 21 years, with the fastest deterioration among borrowers aged 50 and older. Separate private-credit market estimates put the student-loan default rate at about 12.4%. Rising distress is drawing in yield-hungry private lenders even as policymakers scramble to stabilise the $1.6 trillion federal portfolio. Department officials say transfers from MOHELA will be conducted “thoughtfully and in a responsible way that avoids negative impacts to borrowers,” yet advocacy groups warn that past servicing changes have led to lost records and payment disruptions.