A million defaults on federal student loans

NPR - Roughly a million borrowers defaulted on their federal student loans last year, according to federal data and the latest Household Debt and Credit Report from the Federal Reserve Bank of New York. Millions more are delinquent on their payments. New York Fed researchers say they expect the number of borrowers in default to continue to grow. The stakes are high for borrowers — and for the broader U.S. economy.

💵 After 270 days of missed payments, a borrower is considered in default.
💵 A whopping 9.8 million borrowers, many of whom are low-income, have loans in forbearance. Their payments are paused, but their loans still accrue interest, putting them at extra risk of defaulting. 
💵 The Trump administration announced mid-January that it would delay involuntary collections on defaulted borrowers. If the Department of Education returns to garnishing wages and tax refunds, experts say consumer spending, home sales, auto loans and more could drop.