Lawmakers Push Trump Administration To Cancel Eligible Student Loan Debt and Pause Collections

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More than 60 congressional Democrats this week called on Education Secretary Linda McMahon to cancel debt for borrowers who already qualify for forgiveness and to keep collections paused amid what they call the worst student loan default crisis on record.1

The letter comes as more borrowers than ever are behind on their federal student loans. The number of borrowers in delinquency (one missed payment) and default (at least nine missed payments) surged last year.

"The Trump administration’s actions have fueled this default and delinquency crisis," the lawmakers, led by Senators Elizabeth Warren, D-Mass., and Jeff Merkley, D-Ore., wrote in their letter.2 "The administration initially blocked borrowers from accessing lower student loan payments and reduced access to debt relief, while failing to conduct sufficient outreach to borrowers in or at risk of delinquency."

Default can hurt a borrower's credit score and raise the cost of future borrowing. Mass defaults can be a drag on economic growth as borrowers with garnished wages and wrecked credit spend less.

Despite efforts to bring borrowers back into repayment after the pandemic, default and delinquency rates in 2025 were higher than ever.

During the pandemic, the Department of Education paused all federal student loan payments. As part of the pause, borrowers who didn't make payments wouldn't be considered delinquent or in default on their loans.

Payments resumed in October 2023, but an on-ramp period meant missed payments didn't automatically send a borrower into delinquency. The on-ramp ended a year later, and defaults increased dramatically in June 2025, since borrowers do not default until after about nine months of nonpayment.3

As of December 2025, about 7 million borrowers were in default, and more than 3 million were delinquent, according to the Department of Education. That means about one in four of all federal student loan borrowers were behind on their payments.4

In March, a federal appeals court permanently ended the Saving on a Valuable Education (SAVE) plan. Almost 7.2 million SAVE borrowers will soon be forced to choose another income-driven repayment plan or be placed in a standard plan. Experts warn that the end of SAVE will only add to the historically high number of borrowers in default.

In March, the Department of Education announced it was handing over many of its federal student loan responsibilities to the Treasury Department. As part of this transition, the Education Department said it would resume student loan collections.

The Education and Treasury Departments also plan to restart wage garnishments. The government can take part of a defaulted borrower's wages, withhold a portion of Social Security benefits, and seize tax refunds.

The Department of Education has struggled to clear its backlog of loan-forgiveness applications. While the Education Department has made more progress recently, tens of thousands of eligible borrowers are still waiting for their debt to be discharged.

The department has worked through much of a backlog that once neared 2 million applications for income-driven repayment plans, but more than 530,000 were still pending as of April.5

The lawmakers called on the department to cancel debt for borrowers who already qualify under existing forgiveness programs and create a new interest-free forbearance for those who can't afford their payments.1

This letter also asked the Education Department to end its transfer of the federal student loan portfolio to the Treasury Department and continue the pause on wage garnishments for defaulted borrowers.2

The letter gives McMahon until June 22 to report to lawmakers when the department will clear the income-driven repayment backlog and whether it will resume monitoring loan servicers to ensure they're accurately billing borrowers.

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