A wave of student loan borrowers have entered default since pandemic-era
protections lapsed
[July 20, 2026] By
NICKY FORSTER and HEATHER HOLLINGSWORTH
Defaults on student loans have surged across the United States, reaching
record levels as borrowers struggle to keep up with payments.
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.
Here are some takeaways from an Associated Press analysis of student
loan defaults.
Why a record number of people are in default now
The U.S. 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.
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The U.S. Department of Education building is photographed in
Washington, Dec. 3, 2024. (AP Photo/Jose Luis Magana, File)
 Many of the states with the most
defaults are in the South
Many of the states with the highest concentrations of defaulted
borrowers are in the South, an AP analysis found.
Mississippi has the nation’s highest default rate at 28.3%, and
others near the top include Louisiana, Alabama, West Virginia,
Oklahoma, Georgia, South Carolina and Texas. Rounding out the 15
states with the highest default rates are Alaska, Arizona, Ohio,
Indiana, Michigan, New Mexico and Nevada.
Of those states, New Mexico was the only one Republican President
Donald Trump didn't win in 2024.
“These are folks who live in states that President Trump won in the
previous election,” Bañez said. “And why I bring that up is, you
know, there’s a lot of misconceptions and tropes about who student
loan borrowers are, and who are the ones who are falling behind.”
She said many are “working-class folks who just cannot keep up with
these bills on top of everything else.”
Meanwhile, the territory of Puerto Rico had a 30.9% default rate,
higher than any of the states.
Borrowers who attended for-profit schools struggle more to repay
loans
Students who attended for-profit colleges struggle more than others
to pay back their loans. Thirty-three percent of those borrowers
were 90 days or more behind on their student loan payments, a rate
more than double that of borrowers who attended public schools,
according to data by the Office of Federal Student Aid released this
year to help schools understand and identify default risks.
Out of the schools in the top quarter for nonpayment rates, 76% were
for-profit schools.
The FSA argues that a high nonpayment rate represents a “serious
risk” of developing a high default rate.
An association for private trade schools and career colleges is so
concerned it has created a task force to reach out to students about
the importance of loan repayment.
Jason Altmire, the head of the group, Career Education Colleges and
Universities, said some of it can be chalked up to the pandemic.
Other borrowers are confused over the Biden administration’s failed
loan forgiveness effort. Still, he said the issue will be discussed
at the association’s summer convention.
“We take it seriously,” he said. “It’s a real problem.”
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