Treasury Launches Student Loan Support Center Amid Rising Default Rates
The Trump administration announced the launch of a 'Default Loans Support Center' to assist federal student loan borrowers who are behind on payments, as new data show that approximately 9.3 million borrowers were in default by June 30—up from around 6.2 million in 2016. The increase reflects a roughly 50% rise over the past decade and is attributed to factors such as the end of pandemic payment pauses and the termination of the Biden administration's SAVE repayment plan. The Treasury will now oversee collections for defaulted student loans, following an announcement earlier this year that responsibility would shift from the Education Department. Secretary Scott Bessent emphasized restoring fiscal discipline in managing the $1.7 trillion federal loan portfolio. The move aligns with broader efforts to restructure and decentralize education-related responsibilities. The new support center aims to provide defaulted borrowers with information on repayment options, while past Treasury collection attempts have been less effective than those by private companies.
Topics: Education Department federal student loans loan defaults Treasury Department