When the U.S. Department of Education announced this week that it would transfer much of its programs to other agencies, it didn't appear that the country's federal student loan portfolio would be impacted.

However, financial aid experts and consumer advocates are still worried for borrowers.

More than 40 million Americans hold student loans, and the outstanding debt exceeds $1.6 trillion.

"What is concerning is the destabilization of the Department of Education and Federal Student Aid at the very moment when consistent, technically skilled oversight is most needed," said Carolina Rodriguez, director of the Education Debt Consumer Assistance Program in New York.

The major overhaul of the agency is occurring at an especially challenging time for the federal student loan system . M

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