Education Department Shifts 7.7 Million Defaulted Loan Accounts to StudentAid.gov Ahead of July 1 Changes
Updated
Updated · Business Insider · Jun 2
Education Department Shifts 7.7 Million Defaulted Loan Accounts to StudentAid.gov Ahead of July 1 Changes
3 articles · Updated · Business Insider · Jun 2
StudentAid.gov will take over management of defaulted federal student loans from MyEdDebt, while the old site stays live until the transition is finished.
The Education Department said the move is meant to simplify repayment for borrowers in default, who currently must create a separate MyEdDebt account even if they already use Federal Student Aid's main portal.
7.7 million borrowers were in default by the end of 2025, with another 3 million delinquent, raising the stakes because unresolved defaults can trigger wage garnishment, tax refund seizures, benefit offsets and credit damage.
January brought a pause in wage garnishments and tax refund seizures as the Trump administration prepared broader repayment changes — including new plans and borrowing caps — set to take effect on July 1.
The platform shift also comes before a planned transfer of defaulted loan accounts to the Treasury Department, though the administration has not announced a timeline.