New Data: More Than 1.1 Million Federal Student Loan Defaults in 2016
Largest Student Loan Servicer, Navient, Lags in Affordable Repayment Plan Sign-Ups
Washington, D.C. – Analysis of new data released by the U.S. Department of Education reveals millions of Americans are in default on Federal Direct Loans serviced by companies hired by the federal government.
“3,000 preventable student loan defaults each day in America is 3,000 too many.” said Rohit Chopra, Senior Fellow at the Consumer Federation of America and formerly the Consumer Financial Protection Bureau’s Student Loan Ombudsman. “Our broken system works well for the student loan industry, but is failing borrowers, taxpayers, and our economy.”
As of the end of 2016, 42.4 million Americans owed $1.3 trillion in federal student loans. These figures exclude borrowing through private student loans, credit cards, and home equity loans to finance the growing costs of college. The Federal Reserve System puts total outstanding student loans at $1.4 trillion, which includes federal and private loans, but excludes other loans used to finance higher education.
Student loan servicers, the companies paid to collect payments, are responsible for enrolling borrowers in repayment plans to help them avoid default. For example, the Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE) plans help to cap payments at roughly 10% of income, alleviating the burden of student debt.
Yea, but this type of loan is different…
Rest (securitized) here…