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Nearly 30 percent of borrowers were past due on their student loan payments in January of this year, a few months after the federal government lifted the pause on payments, the U.S. Government Accountability Office found in a new report.
Congressional Republicans asked the GAO to review the state of loan repayment following the restart of payments after a three-year moratorium due to the COVID-19 pandemic. The agency found that about 40 percent of borrowers were current on their loans and making payments of more than $0. About 14 percent were current and paying $0 as part of an income-driven repayment plan. Another 17 percent of borrowers were not expected to make payments because their loans were either in deferment or forbearance.
The department stopped reporting borrowers who are behind on their payments to credit reporting agencies last fall as part of a 12-month on-ramp aimed at easing individuals back into repayment. By the end of January, “nearly 6.7 million borrowers had been shielded from negative credit reporting since monthly payments resumed,” the GAO found. The past-due accounts totaled $290 billion in outstanding loans.
The Education Department said in its response to the GAO report that a record 16 million borrowers made payments in January, and that the share of borrowers making payments is the same as it was before the pandemic.
Louisiana senator Bill Cassidy, the top Republican on the Senate education committee, requested the study along with Representative Virginia Foxx, the North Carolina Republican who chairs the House education committee. Both criticized the Biden administration’s student loan policies in statements following the report’s release.
“The majority of borrowers don’t believe they need to pay back the loans they knowingly took on, and who can blame them after years of false hope and illegal schemes from the Biden-Harris administration?” Foxx said.
Cassidy accused the Biden administration of misleading borrowers and setting them up for failure.
“These borrowers are racking up interest with missed payments while waiting for the false promise of widespread debt ‘cancellation’ this administration has no legal authority to deliver,” Cassidy said.
