Federal Student Loan Defaults Exceed 20% of Borrowers, Over $233 Billion Unpaid

The Office of Federal Student Aid said 9.5 million borrowers are in default on federal student loans, meaning they are more than 270 days behind on payments. This figure accounts for just over 20 % of all federal student loan borrowers and corresponds to $233.3 billion of the $1.7 trillion portfolio that is currently unpaid.

The number of borrowers in default has risen sharply since the end of the COVID-19 payment moratorium. In March 2025, the default count was 5.3 million, and the United States added more than 4 million defaults after the moratorium and its nine-month extension expired in September 2024.

Borrowers in default may face collection actions, including referral to collection agencies and wage garnishment. The Department of Education has delayed resuming wage garnishment until January, according to officials.

A federal appeals court recently terminated the SAVE Plan, a repayment program introduced during the Biden administration that reduced monthly payments for 7.5 million borrowers. The decision followed a lawsuit led by attorneys general from several Republican-led states, with the Department of Justice supporting the challenge.

State-level data show the highest default concentrations in the South, with Mississippi reporting over 28 % of its borrowers in default and Puerto Rico exceeding 30 %.

The White House and the Department of Education were contacted for comment but had not responded at the time of publication.