Student Loan Defaults Hit Record High—What Struggling Borrowers Can Do
Summary
A record 9.5 million federal student loan borrowers are in default, nearly double the number from mid-2025, as pandemic payment pauses ended and repayment changes took effect under President Trump’s administration. Default can cause serious financial problems, but borrowers have options like loan rehabilitation or consolidation to resolve default status.Key Facts
- About 9.5 million federal student loan borrowers are currently in default, nearly one in five borrowers.
- The default rate increased sharply after COVID-era payment pauses ended.
- Default means a borrower missed payments for at least 270 days.
- Consequences of default include damaged credit, wage garnishment, and withheld tax refunds.
- The Trump administration reduced repayment options, leading to some borrowers facing higher monthly payments.
- Simply resuming payments does not fix default; borrowers must complete rehabilitation, consolidation, or get a discharge.
- Loan rehabilitation involves making income-based payments to remove default status.
- Loan consolidation can also resolve default by combining loans into a new one with repayment plans.
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