Lawmakers Call on ED to Address Borrower Default and Delinquency Rates
By Maria Carrasco, NASFAA Staff Reporter
Over 60 members of Congress on Sunday sent a letter to the Department of Education (ED) expressing concerns about rising student loan default and delinquency rates, and asked the department for details on its plan to help struggling borrowers.
The lawmakers, led by Sen. Elizabeth Warren (D-Mass.), pointed to multiple analyses, including one by Moody’s Analytics that found student loan delinquency and default rates have spiked to “never-before-seen levels.” Other data points include that nearly 9 million borrowers are in default, and one out of every four borrowers with student loan payments is in delinquency.
However, the lawmakers warned that more borrowers could soon enter default or delinquency with the elimination of the Saving on a Valuable Education (SAVE) plan. ED plans to automatically enroll borrowers currently in SAVE into either the current Standard Repayment Plan or the new Tiered Standard Plan beginning July 1, if they do not select a different repayment plan within 90 days after. The lawmakers criticized this approach, arguing that borrowers who fail to take action could be defaulted into one of the most expensive repayment options rather than an income-driven repayment (IDR) plan.
“The Trump administration’s actions have fueled this default and delinquency crisis,” the letter reads. “The administration initially blocked borrowers from accessing lower student loan payments and reduced access to debt relief, while failing to conduct sufficient outreach to borrowers in or at risk of delinquency.”
The lawmakers listed five recommendations for ED to address the growing number of borrowers in default and delinquency. That includes canceling the loan debt of qualified borrowers, such as those eligible for IDR debt cancellation, Total and Permanent Disability (TPD) discharge, closed school discharge, borrower defense to repayment, and Public Service Loan Forgiveness (PSLF).
The lawmakers also raised concerns over ED’s backlog of IDR applications. The latest data from ED shows that, for the period of April 1-30, ED has a backlog of 530,295 pending IDR applications. ED should clear the existing backlog before moving SAVE borrowers into other repayment plans, and should plan so these borrowers are not trapped in years of IDR processing, the lawmakers wrote.
Additionally, ED should adequately staff itself to conduct outreach to borrowers and to oversee its loan servicers.
For the SAVE borrowers that will be automatically enrolled into another repayment plan, the lawmakers called on ED to automatically enroll these borrowers into the lowest cost repayment plan currently available to them, if the borrower hasn’t already chosen a new repayment plan.
The lawmakers’ last recommendation is that ED continue its pause on forced collections on borrowers and end its new interagency agreement (IAA) with the Treasury Department. Additionally, the lawmakers noted that ED has the authority to create new forms of forbearance under the Higher Education Act (HEA) and should exercise that authority to establish a new interest-free, temporary default-prevention forbearance.
“The student loan default crisis was not a foregone conclusion. 75 percent of borrowers who moved from delinquency to default on a student loan under the Trump administration had never defaulted before,” the letter reads. “Yet instead of pursuing solutions that protect borrowers, the Trump administration has deflected blame, punted responsibility for the default crisis to another agency, and raised costs for borrowers at every turn.”
The lawmakers included a list of questions for ED to answer by June 22, which includes; if ED forecasts the number of borrowers at risk of becoming delinquent or defaulting on their loans for the next 12 months; does ED plan to resume forced collections; what date can ED commit to clearing the backlog for borrowers applying for PSLF forgiveness and IDR loan cancellation; and more.
Publication Date: 6/9/2026
Amy P | 6/10/2026 3:13:29 PM
In the words of economist Michael Hudson, "Debts that can't be paid, won't be paid". And debt collectors, harassment, fees and penalties won't change that.
If anyone knows how many of these defaulted and delinquent loans would have been eligible for the Biden loan forgiven I would love to know. I realize "we are getting a lot of bad debt off the books" was not a strong selling point for his plan but there we are.
(Not looking to rehash the legality of President Biden's plan but given the current world financial reality we cannot pretend that we would all be better off if there was less student debt on the books just as we are about to go into a recession. Or if we are already in a recession.)
David S | 6/9/2026 11:55:27 AM
Wait, there's a backlog of 530,295 pending IDR applications? It's almost as though laying off most ED and FSA staff has an impact on the work getting done. Shoutout to everyone who rejoiced that the mass layoffs were going to lead to a new level of never-before-seen efficiency.
And I bet a lot of people reading this have had bosses get all over them for any backlog of students greater than zero waiting for anything.
You must be logged in to comment on this page.