Federal number crunchers say new data reveals millions of Americans are in default on Federal Direct Loans.

The analysis says at the end of 2016 42.4 million Americans owed $1.3 trillion in federal student loans, and that does NOT include private loans, credit cards, and home equity or home credit line loans used to finance the growing costs of a college education.

“3,000 preventable student loan defaults each day in America is 3,000 too many.” said Rohit Chopra, Senior Fellow at the Consumer Federation of America and formerly the Consumer Financial Protection Bureau’s Student Loan Ombudsman. “Our broken system works well for the student loan industry, but is failing borrowers, taxpayers, and our economy.”

Loan experts at the U.S. Department of Education say student loan servicers, private companies hired to collect federal student loan debt, are not enrolling borrowers in repayment plans like Pay As You Earn (PAYE) and Revised Pay As You Earn (RPAYE) to help them avoid default. These plans can cap payments at roughly 10 percent of income, allowing former students to afford housing, food and transportation.

Here are some highlights of the analysis.

  • Average amount owed is $30,650 per federal student loan borrower. Average amount owed per borrower continues to tick up, rising 17% since the end of 2013, when borrowers owed on average of $26,300.
  • $137 billion in default. For federal loans originated by financial institutions (FFEL) and the US Department of Education (Direct), a total of $137.4 billion in balances were in default, a 14% increase from 2015. This cumulative level of defaulted balances includes loans which defaulted in previous years. Defaulting on a federal student loan comes with severe consequences. Borrowers can face seizure of their tax refund, garnishment of their wages, and an inability to pass employment verification checks.
  • 1 million Direct Loan defaults in 2016. In 2016, 1.1 million Federal Direct Loan borrowers defaulted. Federal law typically defines a federal student loan default as being 270 days past due. Borrowers defaulting for the first time slightly decreased compared to 2015, though borrowers re-defaulting.
  • Data withheld for new defaults in bank-based student loan program. The Education Department did not release data on loans entering default in the bank-based FFEL program. The largest holder of these loans is Navient, with $87.7 billion in outstanding loans as of the end of 2016. “With more than 16 million Americans still on the hook for bank-based federal student loans, the cost of being kept in the dark is real,” said Chopra.
  • Total federal student loan portfolio increases $79.4 billion. Total outstanding federal student loans, including loans owned or guaranteed by the government, increased $79.4 billion in 2016, roughly the same as the $80.2 billion increase in 2015.
  • Navient lags in enrollment on new affordable repayment plans. The Education Department contracts with four major servicers to collect payments from borrowers on loans owned by the federal government. Of these servicers, Navient, formerly known as Sallie Mae, had the lowest percentage of borrowers enrolled in the PAYE and REPAYE plans among those in repayment, deferment, and forbearance. The Consumer Financial Protection Bureau, the Illinois Attorney General, and the Washington Attorney General recently sued Navient for misconduct related to student loan servicing and other violations.

Instead of simply defaulting, borrowers struggling with student loans should visit the Consumer Financial Protection Bureau’s Repay Student Debt tool.