Student Loan Update: 400,000 More Borrowers in Default Under Trump Admin
Summary
The number of federal student loan borrowers who have defaulted increased by 400,000 in early 2026, reaching 9.3 million people. This rise happened as the Trump administration ended pandemic-related relief programs and changed the loan repayment system.Key Facts
- As of June 30, 2026, 9.3 million federal student loan borrowers are in default, up by 400,000 from the previous quarter.
- Defaulted loans total about $234 billion, which is around 14% of all federal student loans.
- Federal student loans go into default after about 270 days without payment.
- Borrowers in default can face serious consequences like lower credit scores, wage garnishment, tax refund cuts, and reduced Social Security benefits.
- Pandemic-era loan payment pauses and protections ended, leading many borrowers to fall behind again.
- The Trump administration replaced the Biden administration's SAVE repayment plan with a new repayment system.
- About 1.5 million borrowers are late on payments and may enter default soon if they do not catch up.
- Experts say rising defaults reflect challenges of returning to normal payments after pandemic relief ended, not only new policies.
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