How Congress Can Reform the Student Loan Default System

Federal student loan default comes with severe consequences. The entire loan balance becomes immediately due, and borrowers face ongoing damage to their credit scores, along with a range of significant fees.

The federal government also wields vast extra-judicial powers to collect student debt, including garnishing wages and seizing Social Security payments and tax refunds. By seizing these benefits, the federal government takes away critical financial lifelines that reduce poverty for millions of families.

Our fact sheet outlines reforms Congress can make to help borrowers get out and stay out of loan default.