ED and Treasury Launch Support Center for Defaulted Borrowers
By Maria Carrasco, NASFAA Staff Reporter
The Department of Education (ED), in collaboration with the Treasury Department, announced on Wednesday a new online portal to support borrowers who have defaulted on their federal student loans and aims to return them to repayment.
This new portal aims to modernize the process of transitioning defaulted borrowers into repayment, ED wrote. Under this new portal, borrowers will have information to understand the consequences of default, and will be able to compare paths to get out of default.
Additionally, in an effort to modernize the process, borrowers will now be able to apply online for loan rehabilitation or consolidation, a process that previously was mail and fax-based. ED noted that borrowers will be able to upload documents, review an estimated payment, electronically sign their agreement, and track their progress for their loan rehabilitation application without leaving the StudentAid.gov website. Borrowers will also be able to make a payment on a defaulted loan online, and review repayment plans and loan-discharge options.
This collaboration between ED and Treasury is under an interagency agreement (IAA) between the two departments, as part of the Trump administration’s broader efforts to dismantle the department. ED touted that since the creation of this IAA, there has been a 69% increase in approved applications for loan rehabilitation.
ED wrote that providing borrowers these resources through an online portal could help borrowers get out of default and improve their financial circumstances.
“This landmark announcement is a historic step toward breaking up the federal education bureaucracy while streamlining critical resources for student loan borrowers in default,” Education Secretary Linda McMahon said in a statement. “The Department of Education was never intended to serve as the fifth largest bank in America, and that’s exactly why we partnered with the Treasury Department to improve the administration of federal student aid programs that millions of American students, families, and borrowers rely on.”
The department provided information on feedback from the portal during its beta testing period. According to ED, 89% of users reported that the application was easy to complete, and 86% said they understood what to do next.
This announcement comes on the same day as the department released the fiscal year (FY) 2023 federal student loan national cohort default rate (CDR), which is 0.4%.
Publication Date: 10/1/2026
You must be logged in to comment on this page.