Student loan default rates surge, 1 in 5 borrowers now in default

Key Points:

• Student loan defaults in the U.S. have reached a record high, with 9.5 million borrowers more than 270 days behind on payments, nearly doubling since the end of the pandemic-related payment moratorium.
• The default rate now exceeds 20% of all federal student loan borrowers, with $233.3 billion of the $1.7 trillion in federally-backed loans in default.
• The Biden-era moratorium on student loan payments ended in January 2024, followed by a nine-month extension, but defaults surged starting June 2025 as borrowers crossed the 270-day delinquency threshold.
• Efforts to reduce repayment burdens, such as the Biden administration's SAVE Plan, were halted by a federal appeals court backed by the Trump Department of Justice and Republican state attorneys general.
• Southern states, especially Mississippi, and Puerto Rico have the highest default rates, with over 28% and 30% of borrowers in default respectively, raising concerns over regional economic impacts.