Defaults on federal student loans in the United States have sharply increased following the resumption of repayment obligations after a pandemic-era pause, recent data shows. As of mid-2026, approximately 9.5 million borrowers—roughly one in five federal student loan holders—are in default, defined as being more than nine months behind on payments. This marks a significant rise from 5.3 million defaults recorded shortly after the payment moratorium ended.

The pause in loan repayments was introduced by the U.S. Education Department during the COVID-19 pandemic to provide financial relief amid widespread economic disruptions. Although payments technically resumed in 2023, the Biden administration implemented an additional one-year buffer, avoiding defaults and allowing millions to emerge from delinquency through federal assistance programs and debt relief initiatives. This buffer expired in the fall of 2024, and by June 2025, borrowers began entering default again, accelerating the growth of the default population in the subsequent months.

Data from the Office of Federal Student Aid reveals that out of $1.7 trillion in outstanding federally backed student loans, $233.3 billion remains in default. The revival of defaults has raised concerns among advocates, who highlight the growing financial strain faced by borrowers amid rising living costs. Aissa Canchola Bañez, policy director for the advocacy organization Protect Borrowers, noted that many struggling borrowers are working-class individuals contending with multiple expenses, making it increasingly difficult to keep up with student loan payments.

The increase in defaults coincides with recent federal policy changes. The Trump administration eliminated the most generous income-driven repayment option, the Saving on a Valuable Education (SAVE) plan, as part of a broader reform intended to simplify the federal student loan system. New borrowers now have fewer repayment choices, limited to one standard plan and one income-driven option, potentially increasing monthly payment burdens for some participants who had previously benefited from more flexible arrangements.

Geographical disparities in default rates remain pronounced, with Southern states exhibiting the highest concentrations of defaults. Mississippi leads with a 28.3% default rate, followed by Louisiana, Alabama, West Virginia, Oklahoma, Georgia, South Carolina, and Texas. Other states with elevated default levels include Alaska, Arizona, Ohio, Indiana, Michigan, New Mexico, and Nevada. Puerto Rico's default rate stands out at 30.9%, exceeding any individual state's rate. Bañez emphasized that many borrowers in high-default states are residents of regions that supported former President Donald Trump in the 2024 election, challenging common assumptions about the demographics affected by student debt.

Borrowers who attended for-profit colleges face particular difficulties in repayment. A recent report found that 33% of these individuals were at least 90 days behind on payments, a rate more than twice that of graduates from public institutions. Among schools with the highest nonpayment rates, 76% are for-profit institutions. The Office of Federal Student Aid warns that elevated nonpayment levels signal a significant risk of rising default rates. In response, the Career Education Colleges and Universities association has formed a task force to improve communication with students about loan repayment obligations. Jason Altmire, the group’s president, attributed some repayment challenges to pandemic-related impacts and confusion stemming from the Biden administration’s unsuccessful loan forgiveness efforts. The issue remains a topic of discussion at the association’s upcoming summer convention.