Rising Student Loan Defaults Challenge Borrowers Post-payment Pause
WHO:
CBS News - Aissa Canchola Bañez, policy director for the advocacy group Protect Borrowers.
AP News - Ashley Dreahn, a borrower who filed for bankruptcy.
AP News - Alan Collinge, founder of Student Loan Justice and author of “The Student Loan Scam.”
AP News - Jason Altmire, president and CEO of Career Education Colleges and Universities.
AP News - Barbara Howaniec, a psychiatric nurse practitioner from Auburn, Maine.
AP News - Shannon Khan, a mental health worker from Webster, Texas.
WHAT:
CBS News - The Trump administration has eliminated the most generous income-driven repayment plan, Saving on a Valuable Education (SAVE), impacting millions of borrowers who will now face higher monthly payments.
AP News - The number of borrowers with defaulted student loans jumped by more than 4.2 million from April 2025 to March 2026.
AP News - There are currently 870,000 borrowers with loans between 181 and 270 days late, on the edge of default.
CBS News - The territory of Puerto Rico has a 30.9% default rate, higher than any of the states.
CBS News - 76% of the schools in the top quarter for nonpayment rates are for-profit schools.
AP News - A Moody’s Analytics report indicated that garnishments are likely to begin within the next year, warning of “an additional headwind in an increasingly fragile economy.”
AP News - The previous record for borrowers in default was 8 million in December 2019.
CBS News - Defaults on student loans have surged, reaching around 9.5 million borrowers in default, which is 1 in 5 federal student loan borrowers.
CBS News - The number of defaulted borrowers increased from 5.3 million to around 9.5 million since June 2025.
CBS News - $233.3 billion of the $1.7 trillion in federally-backed student loans are in default.
AP News - The number of borrowers with defaulted student loans jumped by more than 4.2 million from April 2025 to March 2026.
AP News - 870,000 borrowers have loans between 181 and 270 days late, on the edge of default.
AP News - 33% of borrowers at for-profit schools were at least 90 days late on payments, more than double the rate of borrowers at public schools.
WHERE:
CBS News - Mississippi has the highest default rate at 28.3%, followed by Louisiana, Alabama, West Virginia, Oklahoma, Georgia, South Carolina, and Texas.
CBS News - New Mexico was the only state that Trump did not win in 2024.
AP News - Dreahn works at a Texas prison and lives in an RV park.
WHEN:
CBS News - The Education Department allowed borrowers to suspend federal student loan payments during the pandemic, with payments starting due again in 2023.
CBS News - The one-year buffer period provided by the Biden administration ended in the fall of 2024.
AP News - The wave of defaults began after the pandemic relief measures ended in 2024.
WHY:
AP News - Many borrowers are overwhelmed by their debt and changes to the federal student loan system, leading some to stop making payments.
AP News - Many borrowers are confused over the Biden administration's failed loan forgiveness effort, contributing to the surge in defaults.
CBS News - Borrowers are struggling to make payments due to rising costs and the expiration of the payment pause.
CBS News - The Trump administration eliminated the most generous income-driven repayment plan, SAVE, increasing the financial strain on borrowers.
AP News - Many borrowers are confused about changes to the federal student loan system and the impact of the pandemic on their repayment plans.
HOW:
AP News - The federal government can garnish wages and Social Security payments from borrowers in default, but the Trump administration in January walked back plans to begin collections on their loans.
CBS News - Borrowers enter default after being more than nine months behind on payments, which can lead to wage garnishments or Social Security payment deductions.
AP News - The federal government can garnish wages and Social Security payments from borrowers in default, but the Trump administration delayed collections.
(UPDATED July 20, 2026 23:17 UTC)
The Trump administration has eliminated the Saving on a Valuable Education repayment plan, which was the most generous income-driven option available, leaving millions of borrowers facing higher monthly payments. In the past year, the number of borrowers with defaulted student loans surged by more than 4.2 million, with 870,000 currently at risk of default due to being between 181 and 270 days late on their payments. Although the federal government has the authority to garnish wages and Social Security payments from those in default, the Trump administration recently decided against moving forward with collections on these loans.
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(UPDATED July 20, 2026 19:27 UTC)
Puerto Rico is facing a staggering 30.9% default rate, the highest among all U.S. territories and states, with 76% of the schools in the top quarter for nonpayment being for-profit institutions. A recent Moody’s Analytics report warns that garnishments are expected to start within the next year, adding pressure to an already fragile economy. This surge in defaults is largely attributed to confusion surrounding the Biden administration's unsuccessful loan forgiveness initiative.
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(UPDATED July 20, 2026 12:41 UTC)
Defaults on student loans have surged dramatically, with around 9.5 million borrowers now in default, which represents one in five federal student loan borrowers. This alarming increase from 5.3 million to 9.5 million since June 2025 highlights the financial strain many are facing, exacerbated by rising costs and the end of pandemic relief measures. States like Mississippi lead the nation with the highest default rates, as borrowers struggle to navigate a confusing federal student loan system that has seen significant changes in recent years.