Student loan defaults hit record highs

CBS News -  Defaults on student loans have surged across the United States, reaching record levels as borrowers struggle to keep up with payments. The numbers have spiked since payments came due again following a lengthy pause intended to provide relief during the COVID-19 pandemic. Today, around 9.5 million people - 1 in 5 federal student loan borrowers - are in default, meaning they are more than nine months behind on their payments.

While credit scores can suffer when borrowers are just a few months behind, entering default brings the possibility of more serious consequences, including garnished wages or Social Security payments. For now, the Trump administration has held off on such involuntary collections.

"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 the advocacy group Protect Borrowers.