Default & Collections
Federal student loan borrowers default at an extraordinarily high rate, and the consequences are devastating for borrowers, their families, and the broader economy.
Before the COVID-19 pandemic, nearly one-in-five student loan borrowers were in default. The federal government has extraordinary and incredibly harmful collection tools, often wielded by abusive private contractors. Borrowers also face harsh collection measures, including wage garnishment and the seizure of the critically needed benefits, such as Social Security and the Earned Income Tax Credit, meant to keep people out of poverty. Older borrowers and borrowers of color are disproportionately in default and harmed by the U.S. Department of Education and its private contractors’ abusive and costly debt collection tactics.
WHAT WE’RE DOING
Exposing Abusive Practices
Historically, federal student loan debt collection has been performed by a series of private collection agencies alongside shadow federal contractors, Maximus and others, that operate in the U.S. Department of Education’s name. These companies routinely harass, mislead, and steer borrowers into options harmful to the borrower but lucrative for the company. Protect Borrowers is fighting to end abusive debt collection tactics by exposing predatory collection practices and companies that are threatening the financial security of millions of Americans and the broader economy, working to apply critical consumer protections, and demanding accountability.
Ending Harsh Collection Practices that Throw Borrowers and Their Families into Poverty
The collection tactics used by the federal government far exceed the collection powers of almost any other creditor. Worse yet, the government has demonstrated that it is unable to stop collection and has seized the wages and benefits from borrowers, even when it had no legal right to. The use of these collection tactics must stop. Protect Borrowers works to develop robust policy solutions to end the seizure of the Earned Income Tax Credit and Social Security benefits and protect working families’ wages.
By The Numbers
Every 9 Seconds
Every 9 seconds a new student loan borrower defaulted during the first year of the Trump Administration.
8.8 million
8.8 million borrowers are currently in default, with another 3.37 million who are delinquent. That means more than 1 in 4 borrowers is struggling to keep up with payments.
3.6 million
3.6 million student loan borrowers have defaulted since January 2025.
2/3 defaulted borrowers
Two-thirds of defaulted borrowers are Pell Grant recipients
Nearly 1 MILLION
Nearly 1 million borrowers have been in default for 20 or more years
2.6 million
2.6 million borrowers age 50 or older are in default on their federal student loans
3x
Black borrowers default at approximately 3 times the rate of their white peers