KBRA Releases Research – Federal Student Loan Defaults: DOE Enforcement Delays Temper Consumer Credit Risk

KBRA releases research discussing the resumption of federal student loan collections and the implications for securitized consumer credit performance in 2026.

The U.S. federal government ended forbearance on student loan interest in late 2023, and in mid-2025 it announced the resumption of collections on defaulted student loans. Many viewed this as the official end of pandemic-era borrower protections and a potential source of meaningful headwinds for consumer credit. However, as KBRA noted in a previous report on this subject, these headwinds would only significantly affect securitized consumer performance if the new administration’s Department of Education (DOE) aggressively pursued collection efforts and did not follow through on its commitment to support borrowers. Since DOE collections resumed in May, the degree of enforcement and the implementation of borrower support measures have been the central factors determining any potential credit impact. We continue to believe that the resumption of collections will not represent a meaningful headwind for securitized consumer credit in 2026.

Click here to view the report.

Related Publications

• Federal Student Loan Defaults and Securitized Consumer Credit
• End of Student Loan Forbearance: Implications on Consumer Credit

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1013747

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