Gillibrand, Colleagues Press Trump Administration To Address Student Loan Default Crisis And Prevent Economic Disaster

Gillibrand, Colleagues Press Trump Administration To Address Student Loan Default Crisis And Prevent Economic Disaster

Oct 17, 2025

Nearly 280,000 New Yorkers are at risk of student loan default

U.S. Senator Kirsten Gillibrand (D-NY) is pressing the Trump administration to provide relief for New Yorkers at risk of defaulting on their student loans.

Senator Gillibrand joined Senate Democratic Leader Chuck Schumer (D-NY), Senator Elizabeth Warren (D-MA), Representative Ayanna Pressley (D-MA-07), and 68 other members of Congress in calling on the Trump administration to address the ongoing and unprecedented wave of student loan delinquencies and defaults, which threatens the financial stability of millions and could have disastrous effects on New York's economy.

Recent data suggests that over 5 million student borrowers are likely in default, and almost a third of borrowers - including over 279,000 New Yorkers - are delinquent. The resumption of required monthly payments on federal student loans, combined with Republicans' fervent opposition to measures to ease the burden on student borrowers, have created an anticipated "default cliff" that would threaten the broader economy by suppressing consumer spending and locking families out of housing and other financial opportunities as their credit scores plummet. When a student borrower defaults on their loan, their obligation to repay the loan is accelerated, and they may experience further consequences, including wage garnishment, having their federal income tax refund offset, or being subject to litigation to compel repayment.

"As millions of borrowers face the threat of default, the federal government has a responsibility to step in," said Senator Gillibrand. "A student loan system that pushes people into delinquency instead of helping them build stable futures is broken and unsustainable. I'm proud to join my colleagues in calling on the administration to act swiftly to provide relief and ensure borrowers have a fair chance to get back on their feet."

"If the administration fails to act, millions of Americans will be pushed to financial ruin, and Trump and Republicans will own this economic catastrophe. It's time for Secretary McMahon to focus on commonsense solutions, instead of hiking costs for families at every turn," said Senator Warren.

"Every day this Administration fails to act, more borrowers-especially low-income, Black, and brown borrowers-are pushed closer to financial catastrophe," said Congresswoman Pressley. "This isn't just a policy failure-it's a moral one. If Trump and Republicans truly cared about working families and following through on their promises to lower costs, they would act now before it's too late."

Rather than address this problem, the Trump administration has used the powers of the federal government to deepen the crisis. For instance, since January, the Trump administration has fired over half of the Department of Education's staff, including workers at Federal Student Aid (FSA) who are responsible for resolving problems with student loan repayment. The administration has also created a backlog of nearly 1.1 million unprocessed income-driven repayment (IDR) applications, taking away borrowers' access to affordable monthly payments that would significantly drop borrowers' risks of default.

"[T]his default cliff threatens not only individual financial hardship but also has broader economic implications that warrant immediate intervention and mitigation strategies," wrote the lawmakers.

The coalition urged the Trump administration to take the following steps to address the default cliff:

• Clear the nearly 1.1 million borrower backlog of IDR applications and abandon its plans to mass deny nearly 500,000 IDR applications;
• Create an interest-free temporary default prevention forbearance to protect borrowers who cannot afford their monthly payments;
• Reverse all recent decisions that have increased costs for borrowers and raised the likelihood that they enter default or delinquency;
• Begin a strong outreach campaign, in coordination with members of Congress and key stakeholders, to borrowers who are at risk of entering default or who do enter default; and
• Pause the forced collections process until the above steps have been implemented and until the Education Department implements robust guardrails against predatory and illegal collections practices.

"The student loan default crisis is a significant threat to millions of American families and the broader economy. Congress and the Administration have a responsibility to ensure that federal student loan programs support rather than undermine economic opportunity and stability," concluded the lawmakers.

The coalition requested that, in order to inform their legislative responsibilities regarding the federal student loan system and the functioning of the Education Department, the Department provide answers to the lawmakers' questions by October 25, 2025, including what steps it is taking to protect against and address the rise in federal student loan delinquencies and defaults.

"Instead of bringing down costs, President Trump and Secretary McMahon are working double time to push millions of struggling borrowers off of an unprecedented default cliff that will be economically disastrous for families and the broader economy," said Protect Borrowers Policy Director, Aissa Canchola Bañez. "Americans with student loan debt deserve an Administration that protects borrower rights and ensures that student loan borrowers get the relief they are entitled to under the law. The last ten months have demonstrated that the Trump Administration cares more about lining the pockets of their wealthy friends rather than shielding working families from economic ruin. We applaud Senator Warren, Representative Pressley, and their colleagues for holding the Trump Administration accountable and calling on them to take action to protect borrowers and their families from the largest mass student loan default events in modern history."

Senators Angela Alsobrooks (D-MD), Richard Blumenthal (D-CT), Cory Booker (D-NJ), Tammy Duckworth (D-IL), Dick Durbin (D-IL), Martin Heinrich (D-NM), Mazie Hirono (D-HI), Tim Kaine (D-VA), Andy Kim (D-NJ), Ben Ray Luján (D-NM), Ed Markey (D-MA), Jeff Merkley (D-OR), Alex Padilla (D-CA), Bernie Sanders (I-VT), Chris Van Hollen (D-MD), Raphael Warnock (D-GA), and Ron Wyden (D-OR) also joined in signing the letter.

Representatives Alma Adams (D-NC-12), Yassamin Ansari (D-AZ-03), Becca Balint (D-VT-AL), Suzanne Bonamici (D-OR-01), Julia Brownley (D-CA-26), André Carson (D-IN-07), Greg Casar (D-TX-35), Judy Chu (D-CA-28), Gil Cisneros (D-CA-31), Yvette Clarke (D-NY-09), Emanuel Cleaver (D-MO-05), Steve Cohen (D-TN-09), Danny Davis (D-IL-07), Madeleine Dean (D-PA-04), Debbie Dingell (D-MI-06), Dwight Evans (D-PA-03), Cleo Fields (D-LA-06), John Garamendi (D-CA-08), Sylvia Garcia (D-TX-29), Jahana Hayes (D-CT-05), Jonathan Jackson (D-IL-01), Sara Jacobs (D-CA-51), Pramila Jayapal (D-WA-07), Hank Johnson (D-GA-04), Robin Kelly (D-IL-02), Ro Khanna (D-CA-17), Summer Lee (D-PA-12), Stephen Lynch (D-MA-08), Jim McGovern (D-MA-02), LaMonica McIver (D-NJ-10), Jerry Nadler (D-NY-12), Eleanor Holmes Norton (D-DC-AL), Alexandria Ocasio-Cortez (D-NY-14), Ilhan Omar (D-MN-05), Chellie Pingree (D-ME-01), Delia Ramirez (D-IL-03), Emily Randall (D-WA-06), Jamie Raskin (D-MD-08), Luz Rivas (D-CA-29), Jan Schakowsky (D-IL-09), Terri Sewell (D-AL-07), Lateefah Simon (D-CA-12), Mark Takano (D-CA-39), Bennie Thompson (D-MS-02), Rashida Tlaib (D-MI-12), Paul Tonko (D-NY-20), Lori Trahan (D-MA-03), Nydia Velázquez (D-NY-07), Maxine Waters (D-CA-43), Bonnie Watson Coleman (D-NJ-12), and Frederica Wilson (D-FL-24) also joined in signing the letter.

Senator Gillibrand has been a staunch advocate for workers and families navigating rising costs and unprecedented economic uncertainty. In September, she called on the administration to reverse its plan to reject 460,000 borrowers' applications for more affordable monthly loan payments under income-driven repayment plans. Earlier this year, Senator Gillibrand publicly opposed the Department of Education's decision to suspend forgiveness under the Income-Based Repayment (IBR) program, which denied student debt relief to student loan borrowers who have been in repayment for over 20 years under IBR.

To read the full text of the letter, click here.

###