Is Loan Default the Future for Student Borrowers?

A Pew event explores how to fix a broken system


Is Loan Default the Future for Student Borrowers?

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As millions of borrowers are scheduled to begin repaying their student loans later this year, many are at risk of falling into a permanent cycle of nonpayment and default on their loans unless the U.S. Department of Education makes sweeping changes to repayment and collections rules. Pew research has found that 35% of all borrowers have ever had a defaulted loan, and 66% of those who have experienced default have done so more than once. Even with Department of Education initiatives such as Fresh Start and proposed changes to income-driven repayment, the overall collections system and available pathways out of default remain severe, inflexible, and counterproductive. Now is the time to reform this system before borrowers once again face the prospect of default on their loans post-resumption of payments.

The panel provided critical background for understanding the need for default reform and potential policy options. Topics will included who defaults, the short- and long-term consequences that default has on borrowers, and what more the department can do over the next year to help borrowers stay in repayment and out of default. 


Regan Fitzgerald
Project on student borrower success
The Pew Charitable Trusts
Twitter: @R_Fitzgerald9


Jason Cohn
Center on Education Data and Policy
Urban Institute
Twitter: @js_cohn

Brian Denten
Project on student borrower success
The Pew Charitable Trusts
Twitter: @briandenten

Ilan Levine
Student loan research project
The Pew Charitable Trusts

Sarah Sattelmeyer
Education, Opportunity, and Mobility
New America
Twitter: @sellensatt


3:00 p.m. Welcome and introduction 

3:10 p.m. Moderated panel discussion

4:00 p.m. Audience Q&A

4:30 p.m. Reception and networking

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Student Loan Default System Needs Significant Reform

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As of December 2021, about 43 million Americans held federal student loans, and about 20% of those borrowers were in default, meaning they have failed to make payments for at least 270 days.


It's Time to Reform the Student Loan Default System

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Whatever the outcome of the legal challenge to President Joe Biden’s student loan forgiveness plan—which was recently argued before the Supreme Court—millions of borrowers will still owe billions of dollars. That makes this the best time to fix long-standing problems that have undermined the ability of many borrowers to repay loans that were suspended because of the COVID-19 pandemic, but are slated to resume later this year.

Issue Brief

The Impact of Student Loan Default on Borrowers

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Issue Brief

Among borrowers who have faced student loan default over the past two decades, a majority have experienced multiple consequences—and for many, these penalties have had a major financial impact, according to a new survey from The Pew Charitable Trusts. Although borrowers are largely cognizant that default carries consequences, awareness of specific consequences varies widely, which can cause borrowers to experience penalties they didn’t anticipate.

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