Nearly one-third of borrowers who resumed federal student loan payments in October 2023 are already past due, according to new data from the Government Accountability Office (GAO). The report highlights the difficulties millions of Americans face as they return to repayment after a three-year pause due to the COVID-19 pandemic. 

Why it matters: With $290 billion in loans past due as of January 2024, the GAO report underscores the financial strain on borrowers. More than half of the delinquent borrowers are over 90 days late, and many are protected from negative credit reporting through the Education Department’s temporary “on-ramp” program. [Politico Pro, subscription model] 

By the numbers:

  • The U.S. Department of Education holds $1.5 trillion in outstanding federal student loan debt for nearly 43 million borrowers.
  • Only 17.8 million borrowers, holding about $706 billion in loans, were current on payments as of January 2024.
  • Nearly 10 million borrowers were past due, with 6 million between 91 and 120 days late

What’s next: The Education Department has implemented temporary relief measures, including the “on-ramp” program, which prevents delinquent borrowers from being reported to credit bureaus, and the Fresh Start initiative to help defaulted loans return to good standing. However, these programs are set to end in September 2024, raising concerns about what will happen to borrowers once these protections are lifted​. [Diverse: Issues In Higher Education] 

The SAVE Plan: The new Saving on a Valuable Education (SAVE) income-driven repayment plan has gained traction, with about 25% of borrowers enrolled. The plan offers lower payments based on income, but its full implementation is currently on hold due to ongoing litigation​. [Inside Higher Ed] 

The bottom line: As the Education Department prepares to manage the return to repayment for around 28 million borrowers—a fivefold increase compared to typical years—the challenges are mounting. With many borrowers still struggling to make payments and temporary relief programs expiring soon, the future of student loan repayment remains uncertain​.