More than 40% of Americans who borrowed from the government's main student-loan program aren't making payments or are behind on more than $200 billion owed, raising worries that millions of them may never repay.

About 1 in 6 borrowers, or 3.6 million, were in default on $56 billion in student debt, meaning they had gone at least a year without making a payment. Three million more owing roughly $66 billion were at least a month behind.

Meantime, another three million owing almost $110 billion were in "forbearance" or "deferment," meaning they had received permission to temporarily halt payments due to a financial emergency, such as unemployment. The figures exclude borrowers still in school and those with government-guaranteed private loans.


Navient Corp., which services student loans and offers payment plans tied to income, says it attempts to reach each borrower on average 230 to 300 times--through letters, emails, calls and text messages--in the year leading up to his or her default. Ninety percent of those borrowers, which include federal borrowers as well as those who hold private loans, never respond and more than half never make a single payment before they default, the company says.

The Obama administration--worried about taxpayer costs and the prospect of consumers damaging their credit by defaulting--has stepped up efforts to reach borrowers and offer the income-based repayment plans. In some cases, the government is garnishing wages and tax refunds of borrowers who refuse to pay.

... Even many borrowers who are current on their loans are paying very little. More than a third of borrowers on an income-based repayment plan had monthly payments of zero because their incomes were so low, according to a Navient survey last year.


The Education Department, through private debt-collection agencies, garnished $176 million in Americans' wages in the final three months of last year for student debt, federal data show.

The administration's pursuit of troubled borrowers is drawing criticism from student advocates and their allies in Congress. Last week, the American Civil Liberties Union and the National Consumer Law Center sued the Education Department, accusing it of blocking public access to data on the agency's debt-collection efforts. The groups suggested that the companies collecting debt for the department might be discriminating against black and Hispanic borrowers.

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