The U.S. Department of the Treasury and the U.S. Department of Education announced the launch of the Defaulted Loans Support Center, a new online portal giving Americans with defaulted federal student loans a simpler way to understand their options, address default, and return to repayment.
The portal, available at StudentAid.gov, lets borrowers understand the consequences of default, compare paths out of default, apply online for loan rehabilitation or consolidation, make a payment on a defaulted loan, and review repayment plans and loan-discharge options. Borrowers can complete the rehabilitation application online, upload documents, review an estimated payment, electronically sign their agreement, and track progress without leaving StudentAid.gov. They can also apply online to consolidate and then access a temporary 1% interest rate reduction by enrolling in auto pay.
"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. "The new Defaulted Loans Support Center marks an important early achievement of the Treasury-ED Federal Student Assistance Partnership, bringing Treasury's unique financial and operational expertise to the program, providing defaulted borrowers a clearer path back to repayment, and building a more efficient and accountable system that better serves borrowers and taxpayers."
"This landmark announcement is a historic step toward breaking up the federal education bureaucracy while streamlining critical resources for student loan borrowers in default," said U.S. Secretary of Education Linda McMahon. "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 launch is an early milestone of the Treasury-ED Federal Student Assistance Partnership. According to the release, the partnership has delivered a 69 percent increase in approved applications for loan rehabilitation in fewer than six months since its official launch, and consolidations out of default have increased by 95 percent after the correction of a Biden-era technical issue.
Early user feedback cited in the release indicates 89 percent of borrowers reported the application was easy to complete, 86 percent said they understood what to do next, and 84 percent said the process took a reasonable amount of time. The partnership said it continues to modernize default resolution, improve borrower communications, strengthen operational accountability, and build a federal student loan program that produces better outcomes for borrowers and taxpayers.