The U.S. Government Accountability Office’s Report Finds That Just Under 40% of Student Loan Borrowers Who Have A Payment Greater Than $0 Are Current in Their Scheduled Payments

Overview
Heading into today’s CSPEN Legislative & Regulatory Update webinar, we have two additional topics that will be on the agenda. First, and most notably, is yesterday’s release of a report from the U.S. Government Accountability Office (GAO) entitled “Federal Student Loans: Preliminary Observations on Borrower Repayment Practices after the Payment Pause. (Report)” (www.gao.gov/assets/gao-24-107150.pdf?source=email)

The report, dated July 29, 2024, is addressed to Senate Health Education, Labor & Pensions Committee Ranking Member Bill Cassidy (R-LA) and House Committee on Education & the Workforce Committee Chair, Virginia Foxx (R-NC) and submitted in response to inquiries from Republican leaders regarding the resumption of student loan repayment. The Report states that it describes the extent to which
1. Borrowers were current on their student loan payments, and
2. Borrowers enrolled in the SAVE program.

GAO’s Findings
 In response to the first :
“In summary, about half of borrowers in repayment (17.8 million) were current on their payments, as of January 2024.10 Nearly 30 percent of borrowers were past due on their payments, and the remaining borrowers were not expected to make payments because their loans were in deferment (10 percent) or forbearance (7 percent).”

Included within the “about half (53%) of borrowers in repayment who are current on their payments,” the data shows that 39% of the borrowers in repayment had a scheduled payment of more than $0, while the other 14% of borrowers current on their payments are enrolled in Income-driven repayment plans in which the scheduled payment is $0.

This data leads to the response to the second inquiry regarding the SAVE program. According to the Report, “nearly a quarter of borrowers in repayment were enrolled in SAVE as of January 31, 2024.” The Report further details that, “among the 6.2 million borrowers who were enrolled in SAVE and had scheduled monthly payments, nearly 60 percent (3.6 million) were scheduled to pay $0 as of January 31, 2024.”

Congressional Staff Briefing
The Report also notes that the GAO held a congressional staff briefing on June 5, 2024 and included the PowerPoint slides (updated) that were presented in the briefing.