Student loan defaults surging in wake of COVID-tied payments pause expiration
Summary
Student loan defaults in the United States have reached record levels after the pause on payments ended following the COVID-19 pandemic. About 9.5 million borrowers, or one in five, are now more than nine months behind on their federal student loans, risking serious consequences like wage garnishment.Key Facts
- The pause on federal student loan payments began during the COVID-19 pandemic and ended in 2024.
- Since the pause ended, defaults increased from 5.3 million to around 9.5 million borrowers.
- $233.3 billion of the $1.7 trillion in federal student loans is currently in default.
- Default means a borrower is more than nine months late on payments and could face wage or Social Security garnishment.
- The Trump administration removed the SAVE income-driven repayment plan, reducing repayment options.
- States with the highest default rates include Mississippi (28.3%), Louisiana, Alabama, and others, mostly in the South.
- Puerto Rico has the highest default rate of any territory at 30.9%.
- Borrowers from for-profit colleges have the highest default rates, with 33% more than 90 days behind on payments.
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