Trump Administration Launches Default Loans Support Center Amid Rising Student Loan Defaults

The Trump administration announced Wednesday that it is launching a "Default Loans Support Center" as more student loan borrowers fall behind on their payments.

The new online portal will provide defaulted borrowers with information and options to get current on their loans, according to a press release from the U.S. Department of the Treasury.

The administration announced in March that it will task the Treasury with collecting on defaulted student loans. President Donald Trump has promised to dismantle the Education Department and transfer its authority to other federal agencies and the states.

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

As of June 30, roughly 9.3 million federal student loan borrowers were in default, up from around 6.2 million at the same time in 2016, according to new Education Department data released earlier this month. That's a roughly 50% increase over the last decade.

Student loan defaults are surging due to the end of the Covid-era payment pause and the termination of the Biden administration's SAVE plan, which offered very low monthly bills to millions of borrowers. The unemployment rate among recent college graduates is also rising.

The Treasury Department has been involved in student loan collection efforts in the past. But the department itself found it collected at lower rates than private companies, according to an archived 2016 Treasury blog post viewable through the Internet Archive's Wayback Machine.

Borrowers can be considered in default when they haven't made a scheduled payment in at least 270 days.