How to fix the $5 trillion maze that is federal lending

There’s a quiet but consequential problem in how the federal government delivers basic financial assistance.

Access to federal lending often depends less on eligibility than on a person’s ability to navigate a confusing maze of portals, forms, logins, and conflicting instructions, sometimes across multiple agencies or programs for essentially the same type of loan. What should be a straightforward process instead becomes an exercise in bureaucratic endurance.

Today, the federal government manages roughly $5 trillion in outstanding credit, spread across more than 135 lending programs, many operating on separate systems and technology stacks. At that scale, access should be simple and predictable.

The same fragmentation that frustrates applicants also slows the government itself, forcing staff to rely on disconnected systems, manual workarounds, and inconsistent processes, turning urgency into delay and widening opportunities for fraud. If you’ve never had to chase a federal loan application across multiple websites, you might assume the system is inconvenient in the way a DMV line is inconvenient: annoying but manageable. 

Yet for small businesses, disaster survivors, farmers, students, and families trying to do the responsible thing — apply, borrow, repay — the fragmented experience becomes a real barrier to the outcome they are hoping to achieve. The process quietly rewards those who already know how it works or can afford help — and discourages everyone else.

That’s why the proposed Federal Loan Systems Modernization Act of 2026 represents an opportunity to improve how federal lending programs work for everyone involved. It would authorize Lending.gov as a platform through which participating agencies can offer federal loans while modernizing the loan-management technology behind the scenes — enhancing, not displacing, agency-led modernization efforts already underway. The result would be a simpler, more coherent way to manage the government’s many loan programs.

The bill doesn’t create another large bureaucracy. It is explicit that modernization focuses on back-office functions, like underwriting workflows, document handling, and fraud detection, without changing the authority of the agencies running the programs. That matters at a time when improper payments across federal programs total tens of billions of dollars annually, often exacerbated by outdated, siloed, and duplicative systems.

In other words, it’s a service upgrade aimed squarely at fixing “outdated and fragmented technology” that slows agencies down and locks people out. 

This modernization mission resonates across party lines. Conservatives and progressives are both asking why taxpayers fund duplicative systems that do the same basic work in dozens of different places and why public benefits, especially in moments of crisis, depend on a person’s ability to navigate complex bureaucratic systems. 

We’ve seen successful versions of this modernization story before. When government uses modern, commercially proven technology to dramatically improve the citizen experience, we see clearer steps, faster decisions, fewer errors, and more transparency about what’s happening and why. The public doesn’t experience “IT modernization.” They experience ease and efficiency in programs that impact their daily lives. 

That’s what a platform like Lending.gov can institutionalize: a modern way for citizens to apply for, manage, and repay government loans. Borrowers would have clearer visibility into their balances and obligations, consolidated communications, and simpler tools to stay current, while agencies retain full authority over program decisions and data.

There’s also a broader benefit that’s harder to quantify but easier to recognize. Americans routinely watch private-sector tools get simpler while public-sector tools stay stuck. That gap doesn’t just frustrate people; it quietly erodes trust in government’s ability to deliver. 

The good news is that closing this gap doesn’t require new invention; it simply requires the government to leverage and scale proven commercial solutions, many of which have already succeeded within best-in-class agency programs.

At its core, Lending.gov is a simple idea with transformative potential: to deliver a more efficient, effective, and accountable government for the people it serves.

Matt Lira has served in a variety of senior policy roles at the White House and on the House Leadership staff, where his work focused on advancing innovation, strengthening economic growth, and expanding opportunity.