Defaults on student loans have surged across the United States, reaching record levels as borrowers struggle to keep up with payments, the AP reports. The numbers have spiked since payments came due again following a lengthy pause intended to provide relief during the COVID-19 pandemic. Today, around 9.5 million people—1 in 5 federal student loan borrowers—are in default, meaning they are more than nine months behind on their payments. While credit scores can suffer when borrowers are just a few months behind, entering default brings the possibility of more serious consequences, including garnished wages or Social Security payments. For now, the Trump administration has held off on such involuntary collections.
Despair is on the rise, advocates say. "Folks are struggling to make ends meet and cover all the rising costs of everything else. The growing student loan bills are making things worse and folks are falling behind," said Aissa Canchola Bañez, policy director for the advocacy group Protect Borrowers. An AP analysis of student loan defaults explains why a record number of people are in default now:
- The US Education Department allowed borrowers to suspend federal student loan payments during the economic tumult of the pandemic.
- Though payments technically started coming due again in 2023, the Biden administration provided a one-year buffer period that ended in the fall of 2024. Loans couldn't enter default during this time, and federal programs designed to help delinquent borrowers and debt forgiveness initiatives brought millions out of default.
- Starting in June 2025, with the pause having ended nine months prior, borrowers began defaulting again for the first time since the pandemic.
- Since then, the number of defaulted borrowers has exploded from 5.3 million to around 9.5 million, according to data from the Office of Federal Student Aid. Out of $1.7 trillion in federally backed student loans nationwide, $233.3 billion is in default.
Another wave of defaults could be on the way. The Trump administration has eliminated the most generous income-driven repayment plan, Saving on a Valuable Education, or SAVE, as part of its overhaul of the federal student loan system. The millions of borrowers who had been enrolled in SAVE now will face the strain of paying more each month. Starting this month, new borrowers pick between one standard repayment plan and one income-driven option, as opposed to having several options. The Education Department has described the changes as a simplification of a "fragmented and confusing" system. (Click for more takeaways from the analysis or a few individual stories.)
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