Treasury Launches Default Support Center as 9.3M Borrowers Fall Behind

The Trump administration announced on Wednesday the launch of a new “Default Loans Support Center,” an online resource designed to assist federal student loan borrowers who have fallen behind on payments. The portal aims to provide defaulted borrowers with information and options to bring their loans current, according to a U.S. Treasury Department press release.

The initiative coincides with alarming new data from the Department of Education released earlier this month, which indicates that approximately 9.3 million federal student loan borrowers were in default as of June 30. This figure represents a significant increase from roughly 6.2 million borrowers in default during the same period in 2016, marking an approximate 50% rise over the last decade.

Several factors are contributing to the surge in defaults. The expiration of the Covid-era payment pause has renewed financial pressure on borrowers, while the termination of the Biden administration’s SAVE income-driven repayment plan has eliminated a program that offered very low monthly payments to millions of individuals. Additionally, the unemployment rate among recent college graduates continues to climb.

Treasury Secretary Scott Bessent highlighted the administration’s focus on fiscal responsibility regarding the nation’s $1.7 trillion federal student loan portfolio. In March, the White House announced that the Treasury Department would take the lead on collecting defaulted student loans, a move consistent with President Donald Trump’s broader pledge to dismantle the Education Department and transfer its authorities to other federal agencies and state governments.

“Under President Trump, Treasury and the Department of Education are restoring fiscal responsibility to our nation’s $1.7 trillion federal student loan portfolio,” Bessent said in a statement.

While the Treasury Department has previously been involved in student loan collection efforts, internal findings have indicated that the department collected at lower rates compared to other methods. The new support center is part of a wider strategy to address the growing crisis of delinquency and default in the federal student loan system.