Page 1 GAO-24-107150 Federal Student Loans
441 G St. N.W.
Washington, DC 20548
Accessible Version
July 29, 2024
The Honorable Bill Cassidy, M.D.
Ranking Member
Committee on Health, Education, Labor and Pensions
United States Senate
The Honorable Virginia Foxx
Chairwoman
Committee on Education and the Workforce
House of Representatives
Federal Student Loans: Preliminary Observations on Borrower Repayment Practices
after the Payment Pause
Federal student loans are an important resource to help individuals access higher education. As
of January 2024, the Department of Education held $1.5 trillion in outstanding federal student
loan debt for nearly 43 million borrowers, according to Education.
1
Beginning in March 2020, in response to the COVID-19 pandemic, the CARES Act and related
administrative actions paused several aspects of student loan repayment, including payments
being due and interest accrual.
2
After several extensions, this payment pause ended on August
30, 2023, per the Fiscal Responsibility Act of 2023. Interest began accruing again in September
2023, and monthly payments resumed in October 2023, according to Education.
To assist borrowers who may struggle to make payments, Education introduced a new
repayment plan option and flexibilities. For example, it created the Saving on a Valuable
Education (SAVE) plan, an income-driven repayment (IDR) plan that bases monthly payments
on a borrower’s income and family size. Like other IDR plans, the SAVE plan offers forgiveness
of the borrower’s remaining loan balance at the end of the repayment period, and monthly
payments for some borrowers can be as low as $0 and still count toward forgiveness.
3
1
This includes outstanding William D. Ford Federal Direct Loans and Federal Family Education Loans held by
Education that were in an in-school status, the 6-month grace period before repayment begins, repayment,
forbearance, deferment, and default.
2
The CARES Act was enacted on March 27, 2020. See Pub. L. No. 116-136, § 3513, 134 Stat. 281, 404-05 (2020).
Education implemented this COVID-19 emergency relief for federal student loans retroactive to March 13, 2020, the
date COVID-19 was declared a national emergency.
3
Under the SAVE plan, the remaining unpaid loan balance is forgiven after up to 20 years for borrowers with only
undergraduate loans and up to 25 years for borrowers with any graduate loans.
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Education expects the SAVE plan to result in lower monthly payments for most borrowers
compared to other IDR plans.
4
On July 18, 2024, the U.S. Court of Appeals for the Eighth Circuit
granted an emergency motion for a stay temporarily prohibiting Education from implementing
the SAVE plan.
5
On July 19, 2024, Education announced that borrowers enrolled in the SAVE
plan would be placed in an interest-free forbearance while the litigation was ongoing.
6
Education also established temporary relief options for certain borrowers during the initial period
of resuming repayment. Education instituted a 12-month “on-ramp” to repayment, running from
October 1, 2023, to September 30, 2024, so that financially vulnerable borrowers who miss
monthly payments during this period are not reported as delinquent to credit bureaus, placed in
default, or referred to debt collection agencies. These protections are provided automatically to
borrowers who miss payments—there is no action needed from borrowers. Education also
implemented Fresh Start, a temporary program running through September 2024 that allows
borrowers with defaulted loans to restore them to good standing without the typical requirement
of loan consolidation or loan rehabilitation.
7
Borrowers who restore their loans to non-defaulted
status gain access to IDR plans and postponement options to help them manage repayment.
8
You asked us to provide information on the resumption of student loan repayment. This report
describes the extent to which
(1) borrowers were current on their student loan payments, and
(2) borrowers enrolled in the SAVE repayment plan.
On June 5, 2024, we briefed congressional staff on our preliminary observations. This report
transmits a final version of the briefing slides. We have updated the slides to include information
about relevant ongoing litigation and the status of the SAVE plan after the briefing (see
enclosure I). We have ongoing work examining other related topics, including Education’s
4
Lower monthly payments for borrowers enrolled in the SAVE plan are possible because Education set payment by a
smaller proportion of their income compared to other IDR plans. Monthly payments are set as a proportion of the
borrower’s discretionary income, which Education defines as adjusted gross income that exceeds 225 percent of the
applicable poverty guideline for the SAVE plan, 100 percent of the applicable guideline for the Income-Contingent
Repayment plan, and 150 percent of the applicable guideline for the Income-Based Repayment and Pay As You Earn
plans. Also, under the SAVE plan, if a borrower makes a full monthly payment, the borrower will not be charged any
remaining accrued interest that month. However, for some borrowers with higher income, the SAVE plan may result
in higher payments compared to repayment plans that cap monthly payment amounts at less than or equal to the
fixed monthly payment amount under the Standard 10-year repayment plan.
5
In addition, as of July 19, 2024, there was other litigation involving SAVE that was ongoing. Specifically, on June 24,
2024, the federal court for the District of Kansas issued a preliminary injunction enjoining Education from
implementing parts of the SAVE plan. On June 30, 2024, the U.S. Court of Appeals for the Tenth Circuit granted an
emergency motion for a stay of that preliminary injunction pending appeal.
6
Forbearance allows eligible borrowers to temporarily postpone making payments.
7
Loan consolidation and loan rehabilitation are two options that allow eligible borrowers to get their loans out of
default after they make a series of voluntary on-time monthly payments. For example, borrowers who make at least
three on-time monthly payments can pay off defaulted loans by consolidating one or more loans into a single loan
with a fixed interest rate. Borrowers who make nine on-time monthly payments within 10 months may be eligible for
loan rehabilitation, which entitles them to have the default removed from their credit report. However, borrowers may
rehabilitate a loan only once.
8
As part of the Fresh Start program, Education opted not to resume collections on defaulted loans, such as wage
garnishments and offsets on tax refunds or federal benefit payments.
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guidance and instructions to loan servicers regarding the resumption of federal student loan
payments.
To answer both objectives, we reviewed reports from Education that included summary data on
borrowers’ payment statuses, including current in repayment, past due, deferment, and
forbearance.
9
We focused our analysis on monthly summary data from October 2023 through
January 2024. To better understand changes in Education’s student loan portfolio since the start
of the payment pause, we reviewed selected data from January 2020. We also reviewed
summary data from January 2024 related to borrowers’ enrollment in IDR plans, including the
SAVE plan. We also reviewed relevant federal laws and regulations.
To ensure data reliability, we reviewed available technical documentation, solicited information
from Education, and conducted logic checks. We determined the data were sufficiently reliable
for our purpose of reporting on borrowers’ repayment statuses.
We conducted this performance audit from November 2023 to July 2024 in accordance with
generally accepted government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit objectives.
Borrowers’ Federal Student Loan Status
In summary, about half of borrowers in repayment (17.8 million) were current on their payments,
as of January 2024.
10
Nearly 30 percent of borrowers were past due on their payments, and the
remaining borrowers were not expected to make payments because their loans were in
deferment (10 percent) or forbearance (7 percent). Additional details on borrowers’ loan
statuses and values are depicted in figure 1 below. (For additional information, see enclosure
1).
9
Past due includes any loans borrowers have not paid on time. Past due begins at 1 day past due and includes
periods of delinquency, which is typically defined as more than 30 days past due. Deferment and forbearance allow
borrowers to temporarily postpone making loan payments. Borrowers are eligible for deferment if they are in active-
duty military service; reenrolled in school at least half-time after entering repayment; have income below a certain
level; qualify for federal means-tested benefits, such as Temporary Assistance for Needy Families; or are
unemployed. Borrowers qualify for mandatory forbearance if they meet certain requirements, such as if the total
payment they owe each month for all their federal student loans is 20 percent or more of their total monthly gross
income. Other borrowers experiencing financial difficulties may be eligible for general forbearance.
10
Loans in repayment include those current or past due on their payments as well as those in deferment and in
forbearance. They exclude loans with in-school or grace period status and those in default.
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Figure 1: Number of Borrowers and Dollar Value of Federal Student Loans in Repayment by Status, as of
January 31, 2024
Accessible Data for Figure 1: Number of Borrowers and Dollar Value of Federal Student Loans in Repayment by
Status, as of January 31, 2024
Borrowers (in millions), Total = 33.2 million duplicated borrowers
Percentage
Number in million
Forbearance
a
10%
2.5
Deferment
a
10%
3.3
Past due
b
29%
9.7
4.5 million current borrowers enrolled in
IDR plans were scheduled to pay $0
(14% of total or 25% of current)
25%
4.5
13.3 million current borrowers were
scheduled to pay more than $0 (40% of
total or 75% of current)
75%
13.3
Dollars (in billions), Total = $1,250 billion dollars
Percentage
Dollars in billions
10%
$127
10%
$127
23%
$290
30%
$212
70%
$494
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Source: GAO analysis of U.S. Department of Education data. I GAO-24-107150
a
Three million borrowers with loans totaling $112 billion had in-school deferment.
b
Past-due borrowers were 1 or more days late.
Note: Borrowers may have loans in more than one status. For example, a borrower may be current on one loan and have another
loan that is past due. As a result, the sum of borrowers in the different loan statuses (33.2 million) is slightly higher than the
unduplicated number of borrowers (32.2 million). Percentages do not add to 100 due to rounding. IDR plans are income-driven
repayment plans.
Current borrowers. About 40 percent of borrowers (13.3 million) were current in repayment
with scheduled payments of more than $0 as of January 31, 2024. In addition, about 14 percent
of borrowers (4.5 million) were current with scheduled payments of $0 on IDR plans.
Past-due borrowers. Nearly 10 million borrowers were considered past due on their loan
payments as of January 31, 2024. Six million, or 60 percent of them, were between 91 and 120
days late on their payments.
11
They account for most of the 6.7 million borrowers shielded from
negative credit reporting via Education’s "on ramp" program as of January 31, 2024.
Borrowers Enrolled in the SAVE IDR Plan
Nearly a quarter of borrowers in repayment were enrolled in SAVE as of January 31, 2024 (see
fig. 2).
12
Figure 2: Borrower Enrollment and Outstanding Loan Balances by Repayment Plan, as of January 31, 2024
11
As part of the on-ramp program, Education resets the clock on borrowers who reach 90 days past due, resetting
the number of days past due to zero to protect them from negative credit reporting. However, due to report timing,
these borrowers’ past-due status had not yet been reset to zero as of January 31, 2024, according to Education.
12
Loans in repayment include those current, past due, in deferment, and in forbearance.
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Accessible Data for Figure 2: Borrower Enrollment and Outstanding Loan Balances by Repayment Plan, as of
January 31, 2024
Borrowers (in
millions), Total =
32.8 million
duplciated
borrowers
Percentage
Dollars (in
billions), Total =
1,250 billion
dollars)
Percentage
Other IDR plans
5.5
17%
$304
24%
SAVE IDR plan
7.3
22%
$397
32%
Non-IDR plans
20
61%
$549
44%
Source: GAO analysis of U.S. Department of Education data. I GAO-24-107150
Note: These figures include loans that were current, past due, in deferment, and in forbearance. Borrowers may be enrolled in more
than one repayment plan. For example, borrowers may be enrolled in one repayment plan for loans they took out as a student and
another repayment plan for Parent PLUS loans borrowed for their child’s education. As a result, the sum of borrowers in the different
plan types (32.8 million) is slightly higher than the unduplicated number of borrowers (32.2 million). The Saving on a Valuable
Education (SAVE) plan is a type of income-driven repayment (IDR) plan. IDR plans generally offer lower monthly payment amounts
and extend repayment for up to 20 or 25 years of qualifying payments, after which borrowers become eligible for forgiveness of their
remaining loan balances without needing to apply. On July 18, 2024, the U.S. Court of Appeals for the Eighth Circuit granted an
emergency motion for a stay temporarily prohibiting Education from implementing the SAVE plan.
Among the 6.2 million borrowers who were enrolled in SAVE and had scheduled monthly
payments, nearly 60 percent (3.6 million) were scheduled to pay $0 as of January 31, 2024.
13
See enclosure 1 for more information.
Agency Comments
We provided a draft of this report to Education for review and comment. In its written comments,
reproduced in enclosure II, Education stated that it had anticipated significant challenges in
supporting about 28 million borrowers in returning to repayment—a fivefold increase compared
to the number of borrowers who enter repayment in a typical year—given the agency’s limited
resources and congressional mandates. In addition, Education noted that data typically show
higher risks of delinquency and default for borrowers after prolonged periods of forbearance.
Education provided context about efforts to support borrowers described in the report, including
implementing the SAVE plan and temporary relief options for borrowers who miss payments
(on-ramp) or have defaulted loans (Fresh Start). Education also described additional ongoing
efforts to support borrowers, including communicating with borrowers about repayment and
forgiveness options, launching a new loan servicing system, and providing eligible borrowers
with loan forgiveness. In addition, Education provided technical comments, which we
incorporated as appropriate.
As agreed with your offices, unless you publicly announce the contents of this report earlier, we
plan no further distribution until 30 days from the report date. At that time, we will send copies to
the appropriate congressional committees, the Secretary of Education, and other interested
parties. In addition, the report will be available at no charge on the GAO website
at https://www.gao.gov.
13
Borrowers who have scheduled monthly payments are a subset of borrowers in repayment; they include those
current or past due on their loans and exclude borrowers in deferment and forbearance because they do not have
scheduled monthly payments.
Page 7 GAO-24-107150 Federal Student Loans
If you or your staff have any questions about this report, please contact me at (617) 788-0534 or
[email protected]. Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. GAO staff members who made key
contributions to this report are listed in enclosure III.
Melissa Emrey-Arras
Director, Education, Workforce, and Income Security
Enclosures – 3
Page 8 GAO-24-107150 Federal Student Loans
Enclosure I: Briefing Slides
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Accessible Data for Enclosure I: Briefing Slides
Figure 1 (Enclosure I)
Borrowers (in millions), Total = 33.2 million duplicated borrowers
Percentage
Number in million
Forbearance
a
10%
2.5
Deferment
a
10%
3.3
Past due
b
29%
9.7
4.5 million current borrowers enrolled in
IDR plans were scheduled to pay $0
(14% of total or 25% of current)
25%
4.5
13.3 million current borrowers were
scheduled to pay more than $0 (40% of
total or 75% of current)
75%
13.3
Dollars (in billions), Total = $1,250 billion dollars
Percentage
Dollars in billions
10%
$127
10%
$127
23%
$290
30%
$212
70%
$494
Source: GAO analysis of U.S. Department of Education data. I GAO-24-107150
Figure 2 (Enclosure I)
Total = 10 million duplicated borrowers
Past due
Percentage of borrowers (borrower count in millions)
1-30 days
24% (2.4)
31-60 days
8% (0.8)
61-90 days
8% (0.8)
91-120 days
60% (6.0)
Source: GAO analysis of U.S. Department of Education data. I GAO-24-107150
Figure 3 (Enclosure I)
Borrowers (in millions)
Oct-23
2.3
Nov-23
4.6
Dec-23
4.6
Jan-24
2.5
Source: GAO analysis of U.S. Department of Education data. I GAO-24-107150
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Figure 4 (Enclosure I)
Borrowers (in millions), January
2020
Borrowers (in millions), January
2024
In school or grace
8.3
7.3
Default
7.8
6.0
Forbearance
2.8
2.5
Deferment
3.6
3.3
Past due repayment
4.6
9.7
Current repayment
16.2
17.8
Source: GAO analysis of U.S. Department of Education data. I GAO-24-107150
Figure 5 (Enclosure I)
Borrowers (in
millions), Total =
32.8 million
duplicated
borrowers
Percentage
Dollars (in
billions), Total =
$1,250 billion
dollars
Percentage
Other IDR plans
5.5
17%
$304
24%
SAVE IDR plan
7.3
22%
$397
32%
Non-IDR plans
20
61%
$549
44%
Source: GAO analysis of U.S. Department of Education data. I GAO-24-107150
Figure 6 (Enclosure I)
Borrowers (in millions)
Scheduled payments
of $0
Scheduled payments
of more than $0
Totals
SAVE IDR plan
3.6 (58%)
2.6 (42%)
Total= 6.2 million borrowers
All IDR plans
4.6 (44%)
5.9 (56%)
Total= 10.5 million borrowers
Dollars (in billions)
Scheduled payments
of $0
Scheduled payments
of more than $0
Totals
SAVE IDR plan
$153 (46%)
$180 (54%)
Total= $333 billion
All IDR plans
$215 (36%)
$375 (64%)
Total= $590
Source: GAO analysis of U.S. Department of Education data. I GAO-24-107150
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Figure 7 (Enclosure I)
Consented to use
tax information
Did not consent
(provided
alternative
income
documentation)
Did not
consent
(self-
certified
income
greater
than zero
dollars)
Did not
consent (self-
certified no
income)
Totals
Borrowers (in
millions)
72% (2.6)
8% (0.3)
17% (0.6)
3% (0.1)
Total= 3.6
million
borrowers
Dollar Value
(in billions)
75% ($150)
9% ($18)
14% ($28)
2% ($5)
Total= $201
billion dollars
Source: GAO analysis of U.S. Department of Education data. I GAO-24-107150
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Enclosure II: Agency Comments
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441 G St. N.W.
Washington, DC 20548
Accessible Text for Enclosure II: Agency Comments
June 27, 2024
Melissa Emrey-Arras
Director, Education, Workforce, and Income Security
Government Accountability Office
441 G Street, N.W.
Washington, D.C. 20548
Dear Ms. Emrey-Arras:
I write on behalf of the U.S. Department of Education (Department), office of Federal Student
Aid (FSA) in response to the Government Accountability Office (GAO) draft report, Federal
Student Loans: Preliminary Observations on Borrower Repayment Practices after the Payment
Pause (GAO-24-107150). We appreciate the opportunity to review this draft report, which
contains no recommendations.
A record 16.04 million borrowers made payments on their student loans in January 2024, more
than in any previous month since these data began to be collected in 2018. To date, the share
of the federal portfolio that is making payments has returned to approximately the same level as
in January 2020 (prior to the pandemic and the payment pause).
For context, on March 20, 2020, due to the historic pandemic, for the first time ever, student
loan repayments were placed in a national pause, and interest rates were set at zero percent for
eligible federal student loans. This pause was critical for borrowers as the country reeled under
the financial upheaval and other circumstances due to the pandemic. This unprecedented
payment pause ended in August 2023 because of the Fiscal Responsibility Act of 2023. Interest
resumed accruing in September 2023, and payments were due in October 2023.
The Department anticipated significant challenges in supporting around 28 million borrowers in
returning to repayment, especially given limited resources and other congressional mandates;
this number was five times greater than the typical number of borrowers who had previously
entered repayment in any given year. Data typically show higher risks of delinquency and
default after borrowers experience prolonged forbearances as payment habits change and
become entrenched, while new borrowers develop no payment habits at all.
FSA supported borrowers during this time by processing targeted debt relief for as many as
possible; implementing the Saving on a Valuable Education (SAVE) Plan, which is the most
affordable repayment plan ever created; and creating a temporary on-ramp to protect borrowers
from the worst consequences of missed, late, or partial payments. FSA also executed a
communications plan to reach borrowers directly and hold loan servicers accountable for
informing borrowers of all available options and resources.
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Restarting repayment is an unprecedented challenge that still requires the concerted efforts of
the Department, its contractors, its partners, and Congress. While most borrowers have already
begun making payments, others may need additional time to explore their options and
determine how best to resume payments. To this end, the Department continues to help
borrowers manage their student loans and to prevent defaults and delinquencies for millions of
Americans.
We are pleased that the GAO draft report highlights the Department’s efforts to support
borrowers as they returned to repayment, including important programs like the new SAVE plan
and temporary on-ramp program. A more detailed list of our efforts to support financially
vulnerable borrowers includes:
· Communicating directly to borrowers and ensuring loan servicers inform
borrowers of all available options and resources. Clear and actionable
communication to borrowers is a key factor in successfully resuming payments and
keeping borrowers out of default. We regularly communicate with borrowers, with a
particular focus on their unique situations, to help them smoothly return to repayment
and access resources, programs, and options that are best for them. FSA will
continue to work with its contractors and external partners to give borrowers clear
information as they navigate their repayment options, including considering applying
for loan forgiveness if they are eligible, enrolling in affordable repayment plans, and
enrolling in auto-debit payments if they are able to make regular payments without
experiencing financial difficulties. FSA continues to communicate with borrowers
through email, mail, text message, and over the phone.
· Ensuring that loan forgiveness programs provide borrowers the benefits to
which they are entitled. These efforts have already resulted in approving debt relief
for more than 4.75 million people, totaling more than $167 billion in loan discharges
to date. These loan discharges are part of the Department’s overall statutory
obligations to provide discharges to various groups, including borrowers with
disabilities and those who worked in public service, as well as discharges based on
institutional closure or misconduct that harmed borrowers.
· Implementing the SAVE Plan, the most affordable repayment plan yet. Most
borrowers are saving money under the new plan, which cuts monthly payments to $0
for millions of borrowers making $32,800 or less individually using 2023 Federal
Poverty Guidelines (the cutoff is $67,500 for a borrower with a family of four) and
saves other borrowers an average of $1,000 per year compared to other income-
driven repayment (IDR) plans. Additionally, borrowers on SAVE will not see their
balances grow from unpaid interest. We are encouraged by the rapid growth in sign-
up rates of borrowers into SAVE which, as of the end of May 2024, stands at 7.9
million borrowers, up from the 6.2 million borrowers in January 2024 (the number
reflected in the draft report).
· Developing a faster, more accurate IDR application that borrowers only need to
complete once. The new application is easier than ever, taking less than 10 minutes
for borrowers with an FSA ID to complete. The application benefits from consumer
research and testing to ensure it delivers the clearest, high-quality communications
to borrowers. Borrowers can also now provide approval for the Department to
automatically transfer their tax information from the Internal Revenue Service (IRS)
and consent to allow the Department to automatically recertify their IDR plan every
year using their tax information from the IRS. More than 70 percent of borrowers
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applying for an IDR plan are using this data exchange, as reflected in your report.
The benefits to borrowers and taxpayers of accurate income information will increase
as more borrowers apply or recertify their plans for the first time since the application
launched.
· Launching the SAVE on Student Debt campaign. This campaign, launched in fall
2023, aimed to help borrowers reduce their student loan payments by encouraging
them to enroll in the SAVE Plan. This campaign leverages the efforts of a diverse
coalition of hundreds of corporate, government, community-based, and national
organizations to reach millions of borrowers, particularly in communities where there
is a deficit of trust and populations that are historically harder to reach.
· Creating a temporary on-ramp to protect borrowers from the worst
consequences of missed, late, or partial payments. This 12-month on-ramp is not
a payment pause; payments are due, interest will accrue, and months without
payments will not count toward Public Service Loan Forgiveness (PSLF) or IDR
forgiveness. However, borrowers who miss monthly payments during this period are
protected from the worst consequences of missed, late, or partial payments,
including negative credit reporting for delinquent payments. FSA is using this time to
provide targeted help to these borrowers and for servicers to normalize operations.
As GAO notes, as of January, on-ramp has protected nearly 6.7 million past-due
borrowers from the level of delinquency that leads to negative credit reporting.
· Providing a Fresh Start opportunity to about 7.5 million borrowers with
defaulted federal student loans to return to repayment, just like other borrowers,
so they can benefit from the new SAVE repayment plan and achieve repayment
success.
· Proactively engaging borrowers most at risk of delinquency and default with
high- quality communications from FSA and servicers explaining the steps for
returning to repayment and resources available to borrowers to ease the transition
back into repayment. FSA’s Targeted Early Delinquency Intervention (TEDI) initiative
provides additional direct outreach with enhanced communications specifically to
help borrowers who become delinquent after their payments resumed so they can
more easily find the most appropriate repayment plan for them and successfully stay
out of default. FSA will use evidence collected from A/B message testing (i.e.,
sending different versions of communications to similar borrowers) generated by this
initiative to learn what messages and supports are most effective in reaching these
borrowers and improve its messaging throughout this transition period.
· Modernizing the loan servicing experience to improve borrower outcomes and
increase servicer accountability. The Unified Servicing and Data Solution (USDS)
launched early this year has already begun to provide borrowers with a high-quality
experience and deliver support for at-risk borrowers so that all borrowers can find the
most affordable ways to repay their loans, avoid default, and obtain loan forgiveness
if they are eligible for it. Servicer accountability is a central goal of the new servicing
contracts, which provide financial incentives for better borrower outcomes and
impose consequences for failing to meet expectations.
· Strengthening servicer oversight. Before launching USDS, FSA leveraged new
accountability measures included in recent servicing contract extensions, including
overall borrower satisfaction with servicer interactions, quality of interaction during
borrower calls, ability to answer borrower calls, and accuracy of processing IDR
applications and other loan-related tasks.
Page 41 GAO-24-107150 Federal Student Loans
· Working with federal and state law enforcement to combat scams and fraud.
The Department regularly works with law enforcement partners and other federal
agencies to detect, investigate, and prosecute fraudsters, using advanced analytics
and fraud- prevention techniques. The Department has warned hundreds of
thousands of at-risk borrowers about fraudulent companies, thus saving them from
fraud. Additionally, the Department shares borrower complaints and other analyses
about suspected scams with federal and state regulators. The Department’s work
has also resulted in additional training for contractor staff and borrower-focused fraud
awareness campaigns.
Collectively, the Department’s actions, tools, and resources are supporting borrowers in making
the best repayment decisions for their financial situation and will ultimately increase the number
of borrowers who are able to make their required monthly payments for years to come. And
these efforts are working. Analysis by the Department shows in the first months of the return to
repayment:
1
· A record 16.04 million borrowers made payments on their student loans in January
2024, more than in any previous month since these data started being collected in
2018.
· The share of the federal portfolio making payments returned to approximately the
same level as in January prior to the pandemic.
· The average payment by borrowers making non-zero payments has nearly returned
to its pre-pandemic level.
FSA continues to adapt its communications and operations to respond to changes in borrower
repayment data, including when supports such as on-ramp and Fresh Start end later this year.
The Department continues to analyze its communications plan to inform borrowers of both their
financial responsibility and all available options. The Department will use this analysis to refine
and finalize its communications plan to help support the most vulnerable borrowers. Finally, the
Department continues to assess borrower behavior and the performance of repayment
programs to identify ways to evaluate overall repayment success.
Thank you again for the opportunity to review the draft report. Please find enclosed technical
comments.
We appreciate GAO’s examination of the student loan repayment process as we continue to
work to support borrowers and ensure and improve access to education for all.
Sincerely,
Richard Cordray
Chief Operating Officer
Federal Student Aid
1
Dr. Jordan Matsudaira and U.S. Undersecretary of Education James Kvaal, An Update on the First Months of the
Return to Repayment, U.S. Department of Education (Apr. 12, 2024), https://blog.ed.gov/2024/04/an-update-on-the-
first-months-of-the-return-to-repayment/.
Page 42 GAO-24-107150 Federal Student Loans
Enclosure
Page 43 GAO-24-107150 Federal Student Loans
441 G St. N.W.
Washington, DC 20548
Enclosure III: GAO Contact and Staff Acknowledgments
GAO Contact
Melissa Emrey-Arras, 617-788-0534 or [email protected]
Staff Acknowledgments
In addition to the contact named above, Debra Prescott (Assistant Director), Kathryn O’Dea
Lamas (Analyst in Charge), and Abby Marcus made key contributions to this report. Other
contributors to this report were Elizabeth Calderon, Marcia Carlsen, Linda A. Collins, Kirsten
Lauber, Mimi Nguyen, Jessica Orr, Almeta Spencer, and Adam Wendel.