Record Number Of Student Loan Borrowers Are In Delinquency And Default

A new wave of Education Department data and independent analysis shows that federal student loan delinquency and default have surged to record levels since payments restarted, affecting millions of borrowers.

What the new data shows

• Around 7.7–9 million federal student loan borrowers are now in default, representing roughly one in five borrowers, with about 180–190 billion dollars of federal student debt in default status.

• Separate analysis by The Century Foundation and Protect Borrowers finds the overall student loan delinquency rate climbed from near zero during the payment pause to nearly 25 percent in 2025, as missed payments began to be reported again.

• That report estimates roughly 7.9 million borrowers entered delinquency in just the first three quarters of 2025, with an average balance of about 34,000 dollars.

• Federal Reserve researchers note that more than 10 percent of student loan balances and about 6 million borrowers were already overdue or in default as delinquency reverted to and then exceeded pre‑pandemic norms.

Drivers of record delinquency and default

• The end of pandemic‑era payment relief and the resumption of normal credit reporting caused a sharp jump from artificially low delinquency rates to historically high levels once missed payments started counting again.

• Many at‑risk borrowers were placed into temporary forbearances, which paused payments but allowed interest to accrue, leaving nearly 10 million borrowers in a status that often precedes delinquency and default.

• Analyses highlight disproportionate impacts on lower‑income borrowers and on Black and Native American borrowers, with particularly high shares of past‑due accounts in Southern states.

Credit and economic consequences

• Borrowers who became delinquent in 2025 saw average credit score declines of about 57 points, with roughly 2 million near‑prime borrowers experiencing drops of about 100 points, from around 680 to 580.

• These credit hits make it harder and more expensive to obtain auto loans and personal loans and create new barriers to housing and employment.

• Survey data show about one‑third of people currently repaying student loans have delayed buying a home because of their debt, with even higher shares among Gen Z and Millennial borrowers.

Policy and servicing context

• Federal Student Aid has begun publishing updated nonpayment and outcome data and is pushing institutions to take a more proactive, data‑driven approach to default management in light of these trends.

• The Trump administration recently announced a temporary delay in some involuntary collections for borrowers in default, framing it as part of a broader effort to reform a “broken” student loan system.