U.S. Treasury launches new portal to assist defaulted student loan borrowers

The U.S. Department of the Treasury and the Department of Education have launched a new online portal, the “Default Loans Support Center,” to assist borrowers in resolving defaulted federal student loans. The initiative is part of a broader effort to transfer certain student loan operations from the Education Department to the Treasury Department.

Education Secretary Linda McMahon described the move as a step toward “breaking up the federal education bureaucracy” and streamlining resources. Treasury Secretary Scott Bessent noted the effort aims to restore fiscal responsibility to the nation’s $1.7 trillion federal student loan portfolio.

The launch comes as data shows approximately 9.3 million federal student loan borrowers were in default as of June 30, a significant increase from 6.2 million in 2016. Factors contributing to the rise in defaults include the end of pandemic-related payment pauses, the discontinuation of the SAVE repayment plan, and rising unemployment among recent graduates.