Student loan defaults leap

Newsweek - Student loan delinquency has climbed to roughly 25 percent of borrowers with payments due during the first year of the current Trump administration, according to new analysis.

Researchers from The Century Foundation and Protect Borrowers said the sharp rise in missed payments, nearly triple the pre-coronavirus pandemic rate, has pushed millions into default risk and lowered credit scores, warning of broader financial fallout for households and colleges facing higher nonpayment rates. 

More than 42 million Americans hold student loan debts, according to the Education Data Initiative.

The analysis estimated nearly 9 million borrowers, about one in five, are in default, exposing them to potential wage garnishment and tax refund offsets, though some federal collection tools have been paused.

Being in default on a student loan generally means you have failed to make payments for an extended period and the loan is considered seriously delinquent. For most federal student loans issued by the U.S. Department of Education, a borrower enters default after 270 days, about nine months, of nonpayment.

The delinquency rate for borrowers with payments due reached about 25 percent, nearly three times the 2019 rate, after the end of the pandemic-era protections and subsequent policy changes during 2025.