Record Number of U.S. Borrowers Enter Student Loan Default After Pandemic Pause Ends

Around 9.5 million federal student loan borrowers—roughly one in five—have entered default, meaning they are more than nine months behind on payments, according to data from the Office of Federal Student Aid. The surge follows the expiration of pandemic-era payment suspensions and a one-year buffer provided by the Biden administration that ended in fall 2024.

The Department of Education had allowed borrowers to pause payments during the COVID-19 crisis, and the recent restart of obligations has led the default count to rise from 5.3 million to the current level. Of the $1.7 trillion in federally backed student loans, about $233.3 billion is now in default.

Policy changes under the current administration have eliminated the Saving on a Valuable Education (SAVE) income-driven repayment plan, reducing repayment options for new borrowers to a standard plan and a single income-driven alternative. The Education Department says the reform simplifies a previously fragmented system.

"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 Protect Borrowers.