U.S. Student Loan Defaults Hit Record 9.5 Million Borrowers

Federal student loan defaults in the United States have surged to record levels, with approximately 9.5 million borrowers—one in five—now in default. Data from the Office of Federal Student Aid indicates that $233.3 billion of the $1.7 trillion in federally backed loans are currently in default, an increase from 5.3 million borrowers previously. This spike follows the expiration of pandemic-era payment pauses and a buffer period provided by the Biden administration that ended in late 2024.

Donald Trump has overhauled the system by eliminating the Saving on a Valuable Education (SAVE) plan and limiting new borrowers to only two repayment options. The United States Department of Education characterized these changes as a simplification of a fragmented and confusing system. While the administration has temporarily delayed involuntary collections such as wage garnishment, advocates warn that working-class borrowers are struggling to keep up with rising costs.

Geographic data shows the highest default concentrations in the South, with Puerto Rico reporting a 30.9% default rate and Mississippi reporting 28.3%. Additionally, borrowers from for-profit colleges face significantly higher nonpayment rates than those from public institutions. In response, the association for private trade schools established a task force to assist students with loan repayment.