Defaults on federal student loans have reached historic levels, with approximately 9.5 million borrowers — roughly one in five — now more than nine months behind on their payments, according to data from the Office of Federal Student Aid. The surge comes after pandemic-era relief measures fully expired, ending a multi-year pause that had kept millions of borrowers current.
The defaults began climbing in June 2025, nine months after the Biden administration's one-year buffer period ended and federal student loan payments resumed for the first time since the COVID-19 pandemic began. Before this latest wave, there were approximately 5.3 million borrowers in default. Of the $1.7 trillion in federally backed student loans outstanding, $233.3 billion is now in default.
What the Right Is Saying
Administration officials say they are focused on simplifying what they describe as a fragmented and confusing student loan system. The Trump administration eliminated the Saving on a Valuable Education (SAVE) plan, the most generous income-driven repayment option created under Biden, as part of its overhaul of federal student loans.
The Education Department has described recent changes as a simplification effort that gives new borrowers a choice between one standard repayment plan and one income-driven option rather than several choices. Officials argue this reduces confusion and provides clearer pathways for borrowers.
The administration has also held off on involuntary collections such as wage garnishment or Social Security offsets, measures that typically follow default and can trigger more serious financial consequences for borrowers.
What the Left Is Saying
Progressive advocates and Democratic-aligned groups say the spike in defaults reflects broader economic pressures facing working-class Americans and call for expanded relief programs. Aissa Canchola Bañez, policy director for the advocacy group Protect Borrowers, said borrowers are struggling with rising costs across the board.
"Folks are struggling to make ends meet and cover all the rising costs of everything else," Bañez said. "The growing student loan bills are making things worse and folks are falling behind."
Advocates point out that many defaulted borrowers live in states that President Donald Trump won in the 2024 election, challenging what they describe as misconceptions about who struggles with student debt.
"These are folks who live in states that President Trump won," Bañez said. "There are a lot of misconceptions and tropes about who student loan borrowers are, and who are the ones who are falling behind." She described many defaulting borrowers as "working-class folks who just cannot keep up with these bills on top of everything else."
Progressive groups have called for reinstatement of income-driven repayment plans and debt forgiveness initiatives that brought millions of borrowers out of default during the pandemic era.
What the Numbers Show
Mississippi has the nation's highest default rate at 28.3%, according to an Associated Press analysis of federal data. Other Southern states near the top include Louisiana (27.8%), Alabama (26.9%), West Virginia (25.6%), Oklahoma (24.7%), Georgia (23.4%), South Carolina (22.1%) and Texas (21.8%).
Of the 15 states with highest default rates, New Mexico was the only one that Trump did not win in 2024. The territory of Puerto Rico had a 30.9% default rate — higher than any state.
Borrowers who attended for-profit colleges face significantly higher delinquency rates. Thirty-three percent of those borrowers were 90 days or more behind on payments, more than double the rate for borrowers who attended public institutions, according to data from the Office of Federal Student Aid released this year. Among schools in the top quarter for nonpayment rates, 76% were for-profit institutions.
The FSA has identified high nonpayment rates as representing a "serious risk" of developing into high default rates over time.
The Bottom Line
The spike in defaults represents one of the largest increases in federal student loan delinquencies since the original pandemic pause began in 2020. With $233 billion now in default, the administration faces decisions about whether to resume involuntary collections that have been paused during the transition period.
Borrowers who had enrolled in the SAVE plan are particularly vulnerable, as they now face higher monthly payments under alternative repayment options. Jason Altmire, head of Career Education Colleges and Universities, an association representing private trade schools and career colleges, said his group has created a task force to reach out to students about loan repayment importance.
"We take it seriously," Altmire said. "It's a real problem."
Watch for whether the administration moves forward with wage garnishment or Social Security offsets for defaulted borrowers, which have been on hold since the payment pause ended.