US Treasury launches portal for borrowers in default — CNBC

In the United States, President Donald Trump’s administration has launched an online support center for borrowers with federal student loans who are behind on payments and have defaulted. The Default Loans Support Center portal is intended to provide them with information and options for resuming loan payments.

Millions of borrowers in default

As of June 30, about 9.3 million federal student loan borrowers were in default. This is approximately 50% more than in 2016, when there were around 6.2 million such borrowers, CNBC Top News reports, citing new data from the US Department of Education.

A borrower may be considered in default if they have not made a scheduled payment for at least 270 days. According to CNBC, the rise in defaults is linked to the end of the payment pause introduced during the COVID-19 pandemic, as well as the termination of the Joe Biden administration’s SAVE plan. That plan provided very low monthly payments for millions of borrowers.

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Transfer of debt collection to the Treasury

In March, the administration announced that it would task the US Department of the Treasury with collecting defaulted student loans. President Trump also said he intended to abolish the Department of Education and transfer its powers to other federal agencies and states.

US Treasury Secretary Scott Bessent said that the Treasury and the Department of Education are restoring fiscal responsibility for the $1.7 trillion federal student loan portfolio. The Treasury had previously been involved in collecting such debts, but in an archived 2016 statement, the agency said it had lower recovery rates than private companies.