Student loan borrowers who hope to work out a payment plan no longer need to dig out their mom’s old fax machine, rustle through a desk for a stamp, or even pick up the phone.
The Trump administration unveiled a new student loan default portal to ease the process of applying for assistance with payments.
“Operating as a one-stop shop, the Department of the Treasury and the Department of Education have announced a new Default Loans Support Center, an online portal where borrowers with defaulted loans can apply for loan rehabilitation, consolidate their loans, and make payments in one place,” Madison Doan wrote at The Daily Signal.
The need for streamlined services is growing, as the Trump administration enforce student loan payments.
“This summer, an additional 400,000 borrowers defaulted on their federal student loans, bringing the total number of defaulted borrowers to more than 9 million, or one in five borrowers,” Doan, an education expert with the Heritage Foundation, wrote. “The total amount of defaulted loans equals approximately $234 billion, or about 14% of the entire federal student loan portfolio.”
Those borrowers will now be aided by a better system, according to economist Preston Cooper.
He praised the Trump administration for moving “beyond the fax machine,” which he says will help borrowers avoid penalties when they truly are trying to find a way to pay back loans.
He wrote:
Borrowers can escape these penalties if they rehabilitate their loans and enroll in an affordable repayment plan. But the process of rehabilitation has been cumbersome, to put it mildly. Until now, there was no centralized online option to initiate a rehabilitation: Often, borrowers needed to request one over the phone (and face interminable hold times).
Submitting required documentation was another headache. Systems hadn’t been updated in so long that borrowers still needed to mail or fax in their forms. In my experience, most millennials don’t even know how to use a fax machine.
The changes also make it easier for someone to pay off their student loans, Cooper, with the American Enterprise Institute, wrote.
“Rather than waiting on hold with a federal call center or struggling to find and operate a fax machine, the ability to rehabilitate a defaulted loan online will enable more borrowers to return to good standing, start making payments, and eventually pay off their loans in full,” he wrote.
Read Doan’s article here and Cooper’s essay here.
