Student loan defaults in the United States have nearly doubled in the six months following the end of the federal government’s pandemic-related collection freeze, data released in mid-2026 indicate. The surge reflects widespread difficulties borrowers face in resuming payments amid a complex and rapidly changing loan policy environment.
Since the pause on student loan repayments began in March 2020 under the Trump administration and was extended multiple times by the Biden administration, borrowers have been shielded from defaults and penalties. The forbearance officially ended in mid-2025, with the first wave of defaults emerging nine months later, in June 2025. As of March 2026, over 9.5 million borrowers have defaulted nationally—exceeding pre-pandemic levels.
In Texas, the situation is particularly acute, with approximately 22% of student loan borrowers who entered repayment between January 2020 and May 2025 currently at least 90 days behind on payments. Texas ranks first nationally for the total dollar amount of defaulted loans, totaling nearly $19.7 billion. However, the average defaulted balance per borrower in Texas, about $22,500, is comparatively moderate—ranking eighth lowest among states.
Experts say several factors contribute to the rising defaults. The repeated pauses, extensions, and adjustments to loan repayment programs have left many borrowers uncertain about their obligations and options. The Biden administration introduced the Saving on a Valuable Education (SAVE) plan, an income-driven repayment program that lowered monthly payments for millions, but its rollout faced legal challenges by Republican attorneys general, leaving some borrowers in limbo.
Economic pressures also play a significant role. Slowing job growth in Texas, rising living costs, and widening income disparities have made it difficult for many borrowers, especially low-income families, to resume payments after years without budgeting for them. Some borrowers may have anticipated loan forgiveness under a Biden-era proposal that was ultimately struck down by the Supreme Court in 2023, further complicating repayment decisions.
The impact of defaults is substantial. Falling behind by nine months triggers severe penalties, including wage garnishments, withholding of tax refunds, and damaged credit scores. Student loans are rarely discharged through bankruptcy, meaning defaulted debt can burden borrowers for years. Poor credit can hinder access to housing, vehicles, and even employment, while widespread defaults can constrain broader economic activity.
Borrowers who attended for-profit institutions in Texas have default rates approaching 38%, nearly double those of graduates from public or private nonprofit schools. Research suggests this group faces lower earnings prospects and higher tuition burdens, contributing to repayment difficulties. Additionally, individuals who do not complete their degrees, as well as Black borrowers who face systemic wage gaps and higher unemployment, are at greater risk of default.
Looking ahead, experts and advocates express concern that defaults could increase as changes to federal repayment programs continue. The Biden administration is phasing out the SAVE plan and transitioning borrowers to new repayment options, potentially leading to higher monthly payments for many. Only two repayment plans will be available to new borrowers going forward.
Advocates warn that the evolving and uncertain policy landscape, combined with economic stress, is eroding borrower confidence. “If there was this plan that saved me so much and helped me, and then all of a sudden it gets snatched away two years later, that’s going to make it less likely that I make my payments on time,” said education policy experts.
There is also apprehension about the future of other relief programs such as Public Service Loan Forgiveness, which cancels remaining debt for qualifying government and nonprofit workers after ten years. Many young adults remain anxious over the affordability of higher education and the prospects for debt relief, with some questioning whether attending college remains a viable option for themselves or future generations.