Growing numbers of student loan borrowers went into default as pandemic protections expired

Student loan defaults have spread across the United States, reaching record levels as borrowers struggle to keep up with payments.

Prices rose as payments resurfaced following a long hiatus aimed at providing relief during the COVID-19 pandemic. Today, nearly 9.5 million people — one in five student loan borrowers — are in default, meaning they are nine months behind on their payments.

California fares better than most states, with the 36th highest default rate among the states. Still, 730,000 borrowers, or 18.6%, defaulted in the second quarter.

While credit scores can suffer if borrowers fall behind by a few months, going into default carries the potential for serious consequences, including garnished wages or Social Security payments. For now, the Trump administration has stopped collecting such collections.

Desperation is mounting, advocates say.

“People are struggling to make ends meet and meet all the rising costs of everything else. Rising student loan debt is making things worse and people are falling behind,” said Aissa Canchola Bañez, policy director of the advocacy group Protect Borrowers.

Why is the record number of people defaulted now

The US Department of Education has allowed borrowers to suspend student loan payments during the economic crisis. Although the payments began to appear again in 2023, the Biden administration offered a one-year term that ended in the fall of 2024.

Loans could not be defaulted during this period, and government programs designed to help delinquent borrowers and loan forgiveness programs gave up millions in default.

From June 2025, as the break has ended nine months ago, borrowers start to default again for the first time since the beginning of the epidemic.

Since then, the number of defaulting borrowers has exploded from 5.3 million to nearly 9.5 million, according to data from the Office of Federal Student Aid. Of the $1.7 trillion in federally funded student loans nationwide, $233.3 billion are nonperforming.

Another wave of automation may be on the way. The Trump administration eliminated the leveraged repayment program, Savings for Education Value, or SAVE, as part of an overhaul of the student loan program. Millions of borrowers who were enrolled in SAVE will now face the hardship of paying more money every month.

Starting this month, new borrowers choose between one standard payment plan and one income-driven option, instead of having several options. The Department of Education described the changes as streamlining a “fragmented and confusing” system.

Most of the highest default rates are in the South

Most of the states with the highest concentration of default borrowers are in the South, an Associated Press analysis found.

Mississippi has the nation's highest default rate at 28.3%, and others near the top include Louisiana, Alabama, West Virginia, Oklahoma, Georgia, South Carolina and Texas. Rounding out the 15 states with the highest default rates are Alaska, Arizona, Ohio, Indiana, Michigan, New Mexico and Nevada.

Of those states, New Mexico was the only Republican President Donald Trump did not win in 2024.

“These are people who live in states where President Trump won in the last election,” said Bañez. “And why I bring that up, you know, there's a lot of misconceptions and stereotypes about who gets student loans, and who gets behind.”

He said many are “working people who can't keep up with these costs above all else.”

During that time, the territory of Puerto Rico had a default rate of 30.9%, the highest of any state.

Graduates from for-profit schools are struggling

Students who attend for-profit colleges struggle more than others to repay their loans. Thirty-three percent of those borrowers were 90 days or more behind on their student loan payments, which is more than double the rate among public school borrowers, according to data the Office of Federal Student Aid released this year to help schools understand and identify default risks.

Of the schools in the top quarter of default rates, 76% were for-profit schools.

The Office of Federal Student Aid says the high default rate represents a “serious risk” of developing a high default rate.

The Association of Private Schools and Career Colleges is so concerned that it has created a team to communicate with students about the importance of paying back their loans.

Jason Altmire, head of the group, Vocational Education Colleges and Universities, said some of them could be exacerbated by the epidemic. Some borrowers are confused by the Biden administration's attempt to justify loan defaults. However, he said they will discuss the issue at the association's summer meeting.

“We take it seriously,” he said. “It's really a problem.”

Forster and Hollingsworth wrote to the Associated Press. Khouri is a staff writer for The Times.