The Ombuds Observer

October 2026 | Edition 016

Welcome to the October 2026 issue of The Ombuds Observer! Each issue brings helpful tips and timely updates on education loans, as well as a few insights to make the whole process a little less overwhelming. We’re glad you’re here!

Spotlight

U.S. Department of Education and U.S. Department of the Treasury Announce Launch of Online Default Portal

September 30, 2026 – Late last month, the U.S. Department of Education (ED) and the U.S. Department of the Treasury (Treasury) announced a new online portal designed to help borrowers who have defaulted on their federal student loans return to repayment. ED states in its press release, “The launch of the Defaulted Loans Support Center gives borrowers with defaulted federal student loans a simple, streamlined way to understand the consequences of default and apply online to either rehabilitate or consolidate their loans.”

ED and Treasury entered into an interagency agreement (IAA) in March 2026 and the launch of the portal marks an early milestone of this partnership. The centralized portal provides a modernized and streamlined resource for borrowers to understand their options, understand the consequences of default, and explore different paths to get out of default. Additionally, ED states borrowers will now have a one-stop shop to:

Apply online for loan rehabilitation or consolidation and auto pay
Upload documents
Make a payment on a defaulted loan
Review estimated payments
Electronically sign agreements
Track their progress

ED reports feedback on beta testing has been overwhelmingly positive, touting 89% of borrowers reported the application was easy to complete and 86% said they understood what to do next. ED also claims a 69% increase in approved loan rehabilitation applications since the creation of the IAA, and reaffirmed the partnership will continue its modernization efforts to help produce better outcomes for borrowers.

Read the Press Release

Federal Updates

Good News for PLSF Borrowers: Education Department Abandons Appeal Signaling an End to November PSLF Final Rule

Public Service Loan Forgiveness (PSLF) borrowers can now breathe a sigh of relief. In a filing last Wednesday, 10/21/2026, the U.S. Department of Education (ED) has withdrawn its appeal of a June 30th ruling vacating ED’s PSLF Final Rule issued in November 2025. If enacted, the rule would have allowed ED to deny PSLF eligibility to borrowers whose public service employers were found to have a “substantially illegal purpose.” ED didn’t provide an explanation for its decision, and the June 30^th court order stands.

Want more information? Check out our previous editions:

Do I qualify for PSLF?

Borrowers interested in participating in PSLF must:

Have Direct Loans (or have consolidated other federal student loans)
Work full time for a qualifying employer
Be enrolled in an income-driven repayment (IDR) plan
Make 120 qualifying payments
Submit a yearly Employment Certification Form

Head on over to the PSLF Help Tool to learn more.

New Cohort Default Rates Come With Important Caveats

Official FY2023 student loan cohort default rates (CDRs) were released by the Department of Education (ED) in late September. Cohort default rates are determined by calculating the percentage of a school’s Direct Loan Program borrowers who enter a federal fiscal year (October 1 – September 30) in repayment and default on their loans before the end of the second following fiscal year. FY2023 CDRs span the period of October 1, 2022, through September 30, 2025.

ED reports a FY2023 cohort default rate of 0.4%, an increase over the previous three fiscal years. However, higher education organizations and industry experts have noted that the reported figure may be misleading. The College Investor reports, “That is the fourth straight year the national rate has landed at or near zero, but it bears no resemblance to the 9.3 million borrowers currently in default on federal loans.” ED itself has also briefed that the rates should be reviewed with caution, additionally advising FY2023 CDRs still reflect pandemic era payment pauses and urging all higher education institutions to review their nonpayment rate.

Looking for more info? Check out the links below.

Federal Student Aid Electronic Announcement

(LOANS-26-07) Distribution of FY 2023 Official Cohort Default Rates and Appeal Timeline

The College Investor

The Official Student Loan Cohort Default Rate Is 0.4%. Here’s Why That Number Means Almost Nothing.

Reminders

FAFSA 2027-2028: Key Reminders and FAQs

A quick reminder that the 2027-2028 FAFSA is now open! Students planning on attending college between 7/1/2027 - 6/30/2028 can complete the 2027-28 FAFSA to determine their eligibility for federal, state, and institutional funding. Check out our September Spotlight for additional information, including our Financial Aid Prep Checklist to help you prepare.

To help you navigate completing the FAFSA, we’ve compiled a few frequently asked questions covering important information requested on the FAFSA, and what to expect after you submit.

Does it cost money to complete the FAFSA?

No, the FAFSA is a free application. In fact, “Free” is the very first word that makes up the FAFSA acronym – Free Application for Federal Student Aid. Head on over to StudentAid.gov to apply!

Note: There are individuals and companies that offer services to help you complete the FAFSA and they may charge a fee for these services. The FAFSA itself, however, remains a free application.

Whose information is included on the FAFSA?

The FAFSA will require information from you and additional contributors, if necessary. A contributor is anyone required to sign your FAFSA and provide tax information. Additional contributors may include:

Student’s spouse
Biological or adoptive parent
Parent’s spouse or partner

Where do I report on a college savings account?

College savings accounts are reported as assets under the “Current Net Worth of Investments, Including Real Estate” question.

Dependent Students: This must be reported as an asset of your parents.
Independent Students: This will be reported as an asset of the student.

What happens once I complete the FAFSA?

Once your FAFSA is processed you will receive a FAFSA Submission Summary. An electronic copy of your FAFSA will also be sent to the Financial Aid Office of each school you entered on the FAFSA. The offices will review your FAFSA and notify you if additional information is needed.

Have you received your FAFSA Submission Summary? Check out “FAFSA Submission Summary: What You Need to Know” for more guidance on your financial aid eligibility, making corrections, and next steps.

Have other questions about completing the FAFSA?

Check out FAFSA Help over on Federal Student Aid.

Office Buzz

Meet Us Online: November Webinar Save the Dates

Join our office next month as we continue to partner with Student Debt Crisis Center (SDCC) for upcoming FREE webinars. We're bringing back our most popular webinar covering PSLF, and also diving into what you need to know about exiting the SAVE plan.

We look forward to seeing you there! Details below.

NOV

WEBINAR

Public Service Loan Forgiveness (PSLF) - Student Loan Workshop

Join us for a workshop on what you need to know right now. We will cover federal updates, Public Service Loan Forgiveness (PSLF), repayment options (including the SAVE plan), and other loan forgiveness pathways.

November 5, 2026

12:00 - 1:00 PM ET

Virtual through Zoom

A meeting link will be sent upon registration.

NOV

WEBINAR

Exiting the SAVE Plan and Other IDR Options - Student Loan Workshop

Join us for a workshop on what you need to know right now. We will cover federal updates, repayment options for exiting the SAVE plan, and loan forgiveness pathways.

November 19, 2026

12:00 - 1:00 PM ET

Virtual through Zoom

A meeting link will be sent upon registration.

A link to the video recording will be sent to all registered participants following each webinar.

Resource Hub

Our Resource Hub brings together useful websites and guides we recommend bookmarking to help you stay informed and manage your student loans with confidence.

Federal Student Aid

Federal Student Aid (FSA) is the definitive resource on all federal student loans, including repayment and forgiveness options, servicer information, and more.

Office of the Student Loan Ombudsperson

Bookmark our webpages to stay informed on recent and upcoming changes to student loan administration and to access helpful student loan repayment resource guides.

Connecticut Office of Higher Education

The State of Connecticut Office of Higher Education (CT OHE) includes helpful Connecticut based financial aid resources and programs including the Connecticut Student Loan Reimbursement Program.

FinAid

FinAid has been a trusted guide to college financial aid for over 30 years, helping students and families navigate the Free Application for Federal Student Aid (FAFSA), scholarships, grants, loans, and more.

Smart Moves

We'll keep these tips pinned as helpful reminders while borrowers navigate the student loan changes that took effect July 1, 2026.

Check Your Repayment Status

Log on to Federal Student Aid to understand whether you are in default, delinquent, or in a repayment plan — and check if wage garnishment or tax refund offset notices apply to you.

Explore Alternative Repayment Plans

With SAVE ending and Income-Driven Repayment (IDR) options changing, consider whether Income-Based Repayment (IBR) or other plans suit your income and goals.

Plan for Potential Tax Liability

If you’re nearing forgiveness under an IDR plan, consult a tax professional about the impact of taxable forgiveness in 2026.

Stay Informed on Processing Delays

Because of legal challenges and plan revisions, applications and forgiveness processing may be delayed — stay in close contact with your servicer.

Check Your Inbox for SAVE Plan Emails

SAVE Plan borrowers should watch for emails from their student loan servicer with important information about choosing a new repayment plan and any required next steps.