Student loan defaults have climbed to their highest level on record in the United States, as millions of borrowers struggle to resume payments that were paused during the COVID-19 pandemic. The scale of the shortfall highlights how the end of pandemic-era relief has reshaped the financial lives of a large share of American households.
The strain comes as the federal government has also altered the repayment options available to borrowers, removing a widely used income-driven plan. Together, these developments have pushed the number of defaulted borrowers to levels not seen since before the pandemic began.
Defaults Surge Past Pandemic-Era Levels
According to reports, roughly 9.5 million people, or one in five federal student loan borrowers, are currently in default, meaning they are more than nine months behind on payments. Of the $1.7 trillion in federally backed student loans nationwide, $233.3 billion is now in default, according to data from the Office of Federal Student Aid.
The Education Department had allowed borrowers to suspend payments during the pandemic, and although payments technically resumed in 2023, the Biden administration granted a one-year buffer period that lasted until the fall of 2024. During that stretch, loans could not enter default, and various federal programs helped bring millions of delinquent borrowers back into good standing.
That protection ended in June 2025, nine months after the buffer period closed, and borrowers began defaulting again for the first time since the pandemic began. Since then, the number of defaulted borrowers has climbed from 5.3 million to about 9.5 million.
Aissa Canchola Bañez, policy director for the advocacy group Protect Borrowers, said the pressure borrowers face extends well beyond their loan payments. “Folks are struggling to make ends meet and cover all the rising costs of everything else,” she said. “The growing student loan bills are making things worse and folks are falling behind.”
While a few months of missed payments can already damage a borrower’s credit score, entering full default opens the door to more severe consequences, including garnished wages or Social Security payments. The Trump administration, for its part, has so far held off on pursuing those involuntary collection measures.
For-Profit Colleges and Regional Disparities Stand Out
The Trump administration has also eliminated the Saving on a Valuable Education plan, known as SAVE, which had been the most generous income-driven repayment option available to borrowers. As part of a broader overhaul of the loan system, new borrowers starting this month must choose between one standard repayment plan and a single income-driven option, rather than the several choices previously offered. The Education Department has described the change as a simplification of what it called a “fragmented and confusing” system.
Default rates also vary sharply by region and by the type of school a borrower attended. Many of the states with the highest concentrations of defaulted borrowers are in the South, with Mississippi posting the nation’s highest rate at 28.3 percent. Louisiana, Alabama, West Virginia, Oklahoma, Georgia, South Carolina and Texas also rank near the top, and Puerto Rico recorded a default rate of 30.9 percent, higher than any state.
Borrowers who attended for-profit colleges have struggled disproportionately to keep up with payments. As reported by the Office of Federal Student Aid, 33 percent of those borrowers were 90 days or more behind on their loans, more than double the rate among borrowers who attended public schools. Among schools ranking in the top quarter for nonpayment rates, 76 percent were for-profit institutions, prompting one industry group, Career Education Colleges and Universities, to form a task force aimed at encouraging borrowers to keep up with repayment.
