Bummer. I would definitely contact the department. Did you ask your friend if most students are able to find other methods of funding? For example, at the school where my partner attends they usually have need of extra readers for exams. No one likes to do it because the money isn't good, but if you were desperate it does pay... Also, I spoke with a potential POI who was discussing how I might have funding troubles. This concerned me until I discovered that what she meant was that I might not be on Fellowship for 5 years and might have to apply for TA/RA positions.
eta: you need to figure out if your tuition is paid for or not. That should make a difference.