Student debt news covering loan forgiveness, repayment plans, borrowing trends, and higher education finance reform.
House Republicans proposed a fiscal 2027 education budget that would eliminate federal subsidized loans for undergraduates while increasing the maximum Pell Grant by $50 to $7,445. Higher education advocates criticized the move, arguing it would harm low-income students.
Led by Sens. Warren and Pressley, over 60 Democratic lawmakers called on Education Sec. Linda McMahon to cancel student debt for eligible borrowers and halt the transfer of defaulted accounts to the Treasury. They also requested extending the pause on involuntary collections. At end of 2025, 7.7 million borrowers were in default.
The Trump administration is transferring defaulted federal student loans to the Treasury Department's Cross-Servicing program, which routes borrowers to private collectors Pioneer Credit Recovery and Transworld Systems. Both companies were previously penalized for abusive practices. Over 10 million borrowers are in default or delinquency, and involuntary collections have been paused since January 2026.