Yesterday, the U.S. Department of Education (ED) issued a "Dear Colleague Letter", reminding all institutions of higher ed about their shared responsibility to support student loan borrowers under Title IV of the Higher Education Act (HEA). According to the letter, only 38% of Direct Loan and Department-held Federal Family Education Loan Program borrowers are in repayment and current on their student loans, and almost 25% of the entire portfolio is either in default or a late stage of delinquency.
The ED stresses that "while borrowers have the primary responsibility for repayment", institutions play a key role in the Department's ongoing efforts to improve the loan repayment process and outcomes.
In the letter, the Secretary of Education, Linda McMahon, urges all institutions of higher education that receive federal funding assistance to reach out to all former students to remind them of their obligation to repay any federal student loan that is not in deferment or forbearance, and that they do so before June 30, 2025. ED urges all institutions to begin proactive outreach to former students who are delinquent or in default on their loans to ensure that the schools will not face high cohort default rates (CDRs) next year and lose access to federal student aid.
The release of this Dear Colleauge Letter coincided with the ED's reimplimentation of the Treasury Offset Program on May 5, with ED now resuming collections on its defaulted federal student loan portfolio.
AACS will continue to keep members updated on this matter.
For more information: Dear Colleague Letter Federal Student Aid Website | 
