Growing numbers of student loan borrowers have entered default since pandemic-era protections lapsed
Defaults on student loans have skyrocketed in the United States, reaching record levels as borrowers struggle to meet payments.
The numbers have increased since payments were due again after a long pause aimed at providing relief during the COVID-19 pandemic. Today, nearly 9.5 million people (1 in 5 people with federal student loans) are in default, meaning they are more than nine months behind on their payments.
California fares better than most states, with the 36th highest default rate among states. Still, 730,000 borrowers, or 18.6%, were in default in the second quarter.
While credit scores can be negatively affected if borrowers are only a few months behind, defaulting also brings the possibility of more serious consequences, including garnished wages or Social Security payments. For now, the Trump administration has postponed such involuntary collections.
Advocates say despair is growing.
“People are struggling to make ends meet and cover the rising costs of everything else. Growing student loan bills are making things worse, and people are falling behind,” said Aissa Canchola Bañez, policy director for the Conservation Group.
Why are record numbers of people defaulting right now?
The U.S. Department of Education allowed borrowers to suspend federal student loan payments during the economic turmoil of the pandemic. Although payments technically start coming due again in 2023, the Biden administration has provided a one-year buffer period that ends in the fall of 2024.
During this time, loans failed to default, and federal programs and debt forgiveness initiatives designed to help delinquent borrowers saved millions of people from default.
Starting in June 2025, when the pause ended nine months ago, borrowers began to default again for the first time since the outbreak.
Since then, the number of borrowers delinquent has increased from 5.3 million to nearly 9.5 million, according to data from the Federal Student Aid Administration. Of the $1.7 trillion in federally backed student loans across the country, $233.3 billion are in default.
Another wave of defaults may be on the way. The Trump administration eliminated the most generous income-based repayment plan. Saving Money on a Valuable Educationor SAVE, as part of an overhaul of the federal student loan system. Millions of borrowers who now sign up for SAVE will face the challenge of paying more each month.
Starting this month, new borrowers get to choose between a single standard repayment plan and a single income-based option, rather than having multiple options. The Department for Education described the changes as a simplification of a “fragmented and confusing” system.
Most of the states with the highest defaults are in the South
An Associated Press analysis found that many of the states with the highest concentrations of defaulted borrowers are in the South.
Mississippi has the nation’s highest delinquency rate at 28.3%, and others near the top include Louisiana, Alabama, West Virginia, Oklahoma, Georgia, South Carolina and Texas. The 15 states with the highest default rates are Alaska, Arizona, Ohio, Indiana, Michigan, New Mexico and Nevada.
Among these states, New Mexico was the only state that Republican President Donald Trump could not win in 2024.
“These are people who live in states that President Trump won in previous elections,” Bañez said. “And the reason I bring this up is, you know, there are a lot of misconceptions and innuendoes about who gets student loans and who gets left behind.”
Many, he said, are “working-class people who can’t keep up with these bills on top of everything else.”
Meanwhile, the default rate in the Puerto Rican territory was higher than any other state, at 30.9%.
Borrowers who attended for-profit schools have a harder time paying back their loans
Students who attend for-profit colleges have more difficulty than others repaying their loans. Thirty-three percent of these borrowers were 90 days or more behind on their student loan payments, according to data the Office of Federal Student Aid released this year to help schools understand and identify default risks; This rate is more than twice that of borrowers who attended public schools.
76% of schools in the top quartile for delinquency rates were for-profit schools.
The Office of Federal Student Aid argues that the high delinquency rate poses a “serious risk” of a high delinquency rate.
The association of private trade schools and career colleges is so concerned that it created a working group to reach out to students about the importance of loan repayment.
Some of that can be attributed to the pandemic, said Jason Altmire, president of the Career Education Colleges and Universities group. Other borrowers are confused by the Biden administration’s failed loan forgiveness effort. Still, he said the issue would be discussed at the association’s summer meeting.
“We take this seriously,” he said. “This is a real problem.”
Forster and Hollingsworth write for the Associated Press. Khouri is a staff writer for the Times.
