The headline number in the June 2026 federal student loan data was 9.3 million – the count of borrowers in default. A more surprising number from the same release: some of those borrowers have been in default for close to two decades, and until weeks ago the workflow for pulling any of them out was still routed through fax.
That detail is the frame of a recent American Enterprise Institute piece on the US Department of Education’s default pipeline. To exit default – through rehabilitation or consolidation – a borrower generally had to call in to request forms and wait on hold. Then they had to fill the pages in and return the signed packet by mail or fax.
Over 5 million of those 9.3 million borrowers have been in default since at least 2019. In all that time, the back-office machinery for pulling a borrower out had not materially moved off the fax-and-mail workflow it was originally built on.
Why the fax step survived this long
That is not an outlier at the Department of Education; it is a pattern. The federal student loan portfolio sits around $1.64 trillion. Roughly $234 billion of that, about 14%, is in default. Managing those accounts means routing paperwork between loan servicers, state-chartered loan guarantors, and the department itself, each with its own forms, numbers, and intake rules. Replacing one piece without breaking the others is a long institutional job.
For borrowers, the cost of that institutional plumbing was not abstract. The AEI piece notes that documents could be lost, deadlines missed, or a next step forgotten at any number of points along the way. When a form only lands with the servicer if a fax goes through cleanly, every missed page is a reason the default stays open another month.
What replaced it, and when
In late September 2026, the Education Department and Treasury launched a Defaulted Loans Support Center inside StudentAid.gov. Borrowers can now compare resolution options, apply for rehabilitation or consolidation online, review repayment and discharge choices, and make a payment on a defaulted loan. It is the first centralized online entry point for defaulted-loan resolution.
This fits a broader federal unwind of fax-based workflows. The US healthcare industry got its own federal push off fax machines earlier this year under HTI-4. A separate federal plan to restore faith in government by improving services specifically named mail and fax as workflows due for replacement. Student loan defaults are one more thread in that same slow unwind.
For anyone caught mid-transition – a defaulted-loan form that still names a fax number on page three, or a servicer that only accepts signed pages by fax – pay per fax handles the one-off page without a subscription until the online portal catches up with that specific case.